The U.S. stock exchange (U.S.) stock market soared on Tuesday following expectations of investors expecting clear results on who will be the U.S. President. Investors do not expect any delays or re-elections.
The momentum of the strengthening of the US dollar began to level after the strengthening was shown last week against other major currencies as currency traders were more likely to take a neutral position ahead of the announcement of election results.
The US dollar index, which measures the greenback against other currencies, declined 0.56% to the 93.618 exchange rate as of 8.45 p.m. The Dow Jones futures exchange-traded 436 points higher or rose 1.7%. Meanwhile, the S&P 500 futures exchange rose 1.4% and the Nasdaq 100 rose 0.7%.
According to analysts, the biggest market expectation is transparency in the electoral process. However, if there is a flaw, or re-election or very tight competition then it will bring risks to the US Dollar stock and currency markets.
Ahead of the election results, former Vice President Joe Biden is rocking the polls by gaining 52% of the vote compared to President Donald Trump who garnered 42% of the vote based on a Wall Street Journal poll.
At the same time, investors are also focusing on the impact of the election as it will have an impact on Congress. Major policy changes, including further fiscal stimulus, depending on those who have the majority.
Many market players believe that Joe Biden’s victory will push the USD lower against expectations that he will open the door to policies that investors see as ‘dollar-negative’, including massive fiscal stimulus.
Meanwhile, if Trump wins, the outlook for the value of the USD is less clear. This is because, although Trump's approach to war with China will increase the attractiveness of the USD as a safe-haven asset, this increase is likely to be affected by factors such as negative US treasury revenue.
In addition to the presidential election, the U.S. is also facing a surge in Covid-19 cases. Covid-19 cases in the U.S. continued to rise over the weekend with more than 81,400 new infections recorded on Sunday. This brings seven days of cases in the U.S. to over 81,000 cases.
