Foreign exchange markets on Tuesday priced for a possible Joe Biden president despite rising concerns over possible post-election disputes that could increase the dollar’s volatility. The dollar fell 0.44% against a basket of currencies at 93.618, after recording a month high on Monday.
- Analysts expect Biden win to weaken the dollar due to more spending on stimulus and a freer approach to trade.
- The euro rose 0.58% against the dollar, crossing the $1.17 level, while the sterling strengthened to almost the $1.30 bar.
- Euro/dollar implied volatility rose over 19%, the highest level since March, compared to less than 7% on Monday.
- Aussie rose 0.15% against the dollar after an initial fall on Tuesday following the lowering of the policy interest rate by 15 basis points to 0.1% and the announcement of a bond-buying programme
- The yen, considered as a safe-haven, rose 0.03% at 104.69 per dollar.
- Investors had taken a cautious approach to the elections as Republican Donald Trump trailed Biden in national opinion polls and criticized the mail-in ballot system
The dollar index is declining. DXY is down 0.68%
