Biden On The Victory Threshold, Market Reaction To US Dollar Is Getting Clearer!

 The US dollar recorded a 3-day consecutive decline to its lowest level in 2 years as presidential candidate Joe Biden had a high probability of holding the post of President of the United States (U.S.).

The US dollar index, which measures the green back against major currencies, declined 0.67% to 92.787 as of 11.20 p.m. This reading follows after the euro strengthened 1% and the yen surpassed the exchange rate of 104 against the US dollar.

According to analysts, the US dollar tends to depreciate if there is a high probability Biden will win the election. Analysts also believe that the US dollar is trading as a safe haven and the prospect of faster election results will affect market risk appetite and drive the depreciation of the US dollar.

Some investors believe that Biden's victory will spur more momentum. Plus the expectation that The Fed will give a dovish statement on Thursday.

With the successful acquisition of Wisconsin and Michigan, Biden is now close to getting 270 electoral votes. The market focus is now on several states (swing states) that have not yet been announced,

Apart from waiting for the election results, investors are also looking forward to the FOMC policy meeting, where the Federal Reserve (Fed) is expected to keep interest rates unchanged on Friday (3.00 am).