Elections 2020: US Dollar Soar Despite Biden’s Lead, Equities Rally
The US dollar traded in green as the election vote count begin and initial results show that former vice president Joe Biden is leading in electoral votes. Meanwhile, the incumbent president Donald Trump is leading in a few swing states.
The rally in the US dollar is quite surprising amid the opinion that Joe Biden win could result in massive stimulus programs, which would support equities and reduces investor’s focus towards safe-haven assets.
The USD index, which tracks the US dollar against the six major currencies, traded above 94 levels before reversing some gains. The index is currently trading around the 93.90 level.
Joe Biden win could negatively impact the US dollar
The majority of traders believe Joe Biden win would put pressure on the US dollar as the democrat’s administration is likely to introduce stimulus packages to heal the economy and support the struggling small business.
Moreover, the market analysts claim that Biden will soothe its relationship with China and other big economies. The end of the trade war between the United States and China would bring significant improvement in the global economic environment.
Investors believe focus towards the safe-haven assets would reduce after the election amid Joe Biden’s policies. Consequently, the greenback will suffer losses.
Equities Rally and Gold Fell on Initial Results
US stock markets have started shining amid Joe Biden’s lead in election results. The former president has secured more than 210 electoral votes while Trump is standing around 140 electoral votes.
Dow Jones Industrial Average futures jumped more than 2% while the S&P 500 futures are up almost 1.7%. A few analysts are of the opinion that Biden’s significant lead in initial vote count has reduced the election-related volatility. NASDAQ index trading was halted early today amid the sharp rally in futures. Meanwhile, gold fell below the $1900 mark amid the strength in the US dollar.