The U.S. dollar weakened against the majority of its peers as voters went to the polls to elect the person who will run the world’s biggest economy for the next four years. The greenback traded at an eight-week high earlier against the Euro while market investors were uncertain over how the elections would play out. According to the latest results incumbent President, Barack Obama won the U.S. elections.
He must now begin focusing on setting policy including who will chair the Federal Reserve. In the meantime, the Canadian dollar gained slightly against its U.S. counterpart and traded steady as the nation’s Ivey Purchasing Managers Index showed a decline for the month of October.
In the euro region, market investors remained concerned as Greece’s Parliament prepares to vote on a package of austerity measures needed to secure the next payments of international aid. Reports indicated that Greek Prime Minister, Antonis Samaras, failed to obtain the support of the three-party coalition for the measures. The British pound hovered very close to a one-week low against the U.S. currency as investors paid close attention to the U.S. Presidential Elections.
Trading was light as investors remained cautious ahead of the U.S. elections, and as they look forward to news from Greece, where Parliament will vote on the austerity package required by the Troika for the nation to obtain further financial aid. In the U.K., lackluster economic data renewed concerns that the economy may falter as the year comes close to the end.
The yen gained against the U.S. dollar after the greenback moved up and down within a tight range as investors opted for staying on the sidelines in anticipation of the U.S. Presidential Elections. But the dollar managed to recoup some of its losses as investors continue to speculate on whether the Bank of Japan will increase stimulus after it eased monetary easing one week ago.
Lastly, in the South Pacific, the Australian dollar reached a one-month high against the greenback after the Reserve Bank of Australia surprised the markets by announcing it will leave the interest rate at 3.25 percent. But demand for the currency was dampened by worries Greece will fail to obtain its next installment of aid money. The New Zealand dollar also advanced versus the greenback in anticipation of the U.S. Presidential Elections.
EUR/USD- Investors Eye Greek Vote
The euro rallied against the U.S. dollar although its gains were limited as investors awaited the U.S. Presidential Election results. They were also waiting to find out if Greece’s Parliament will approve the package of austerity measures needed to secure the next bailout payments. The shared currency was little changed after official reports indicated that German Factory Orders dipped 3.3 percent last month, while economists forecast a 0.5 percent decline, raising concerns that the sovereign debt crisis has affected the region’s biggest economy. Other data revealed that the eurozone’s Services PMI fell from 46.2 to 46.0 in October as output contracted further in the region’s largest economies.
GBP/USD- Industrial Production Falls
The British pound traded low against the U.S. dollar as market investors kept their eyes on the U.S. Presidential Elections. On the data front, the Office For National Statistics indicated that Manufacturing Production rose by a mere 0.1 percent while analysts predicted it would go up by at least 0.3 percent. Other releases revealed that Industrial Production slipped 1.7 percent in September while it was anticipated to dip 0.6 percent after it declined 0.5 percent the month before.
Economists believe that the disappointing metrics show the U.K.’s recovery is slowing down as the year is coming to the end, despite the fact that data from October suggested the country managed to come out of the recession. Lastly, the Mortgage Lender, Halifax stated that Home Prices went down 0.7 percent in September.
USD/CAD- Canada Issues Ivey PMI Data
The greenback weakened against the Canadian dollar in anticipation of the U.S. Presidential Elections. Meanwhile, the Loonie climbed against the U.S. currency as reports indicated that crude oil, its biggest export rose 1.14 percent to $86.62 a barrel on the New York Mercantile Exchange. The Canadian currency remained little changed even after economic data showed that the nation’s Ivey Purchasing Manager’s Index slipped from 60.4 to 58.3 in October.
AUD/USD- RBA Surprises Investors
The Australian dollar rose to the highest level since September as the country’s central bank surprised speculators by leaving the overnight benchmark interest rate unchanged at 3.25 percent. The decision was followed by a statement from the bank’s Governor, Glenn Stevens wherein he indicated that the board expects inflation to fall in line with the target rate. Other reports showed that Australian Home Prices climbed in the months between July and September. An index measuring the average of prices in major eight cities showed a hike of 0.3 percent from the prior quarter.
Today’s Outlook
Today’s economic calendar shows that Switzerland will report on CPI. The E.U. will release data on Retail Sales. New Zealand will issue the Unemployment Rate and Changes in Employment. Japan will announce the Adjusted Current Account. And Australia will publish the Unemployment Rate as well as Changes in Employment.
