The US dollar advanced against many of its currency peers on Wednesday as the 2020 presidential election potentially becomes a contested affair. An official result was not announced, and many votes are still being counted in many key battleground states. With the historic race potentially being taken to the Supreme Court, financial markets are not reacting favorably.
Former Vice President Joe Biden failed to emphatically defeat President Donald Trump, and the media’s prediction of a blue wave failed to materialize. But while Trump is trying to claim a premature victory, the US is left without a definitive winner, triggering political uncertainty in a chaotic environment.
The Electoral College leaderboard shows Biden with 238 and President Trump with 213. The latest vote count suggests that Trump was trending to win the crucial swing states of Michigan, Pennsylvania, and Wisconsin. Out of fear that his opponents might surprisingly discover thousands of votes somewhere, Trump threatened Supreme Court action.
This is a fraud on the American public. This is an embarrassment on our country.
We were getting ready to win the election, frankly, we did win this election. Weâll be going to the US Supreme Court. We want all voting to stop. We donât want them to find any ballots at 4:00 in the morning and add them to the list.
Itâs a very sad moment. To me, this is a very sad moment, and we will win this. As far as Iâm concerned, we already have won it.
What happens over the next 72 hours is anyone’s guess, but this is exactly the situation that global financial markets wanted to avoid. The leading US stock benchmarks were in the green throughout most of election night, but the Dow Jones Industrial Average and the S&P 500 futures slipped into the red when it appeared that an official victory would not be confirmed. The Nasdaq Composite Index is still trading higher.
On the data front, investors will comb through the latest mortgage applications, trade data, and non-manufacturing purchasing managers’ index (PMI) readings.
The US Dollar Index, which measures the greenback against a basket of currencies, surged 0.54% to 94.06. Investors will inevitably pour into the buck over the next several sessions, primarily to seek refuge from the upcoming volatility that will cripple markets.
The US Treasury market was red across the board. The benchmark 10-year bond fell 0.086% to 0.793%. The two-year note dipped 0.011% to 0.157%, while the 30-year bond plunged 0.104% to 1.55%.
The USD/CAD currency pair climbed 1.04% to 1.3275, from an opening of 1.3140, at 08:06 on Wednesday. The EUR/USD tumbled 0.51% to 1.1662, from an opening of 1.1721.
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