[VIDEO] Currency Point: Star Spangled Banner

[VIDEO] Currency Point: Star Spangled Banner, FP Markets

All that matters this week is the US Election – the risks are high and the permutations large. Interestingly FX markets have actually entered this strange period of ‘quiet’ as it is a calm before the storm event.

Webinar (Nov 2, 7pm AEDT) Election Day Trading Plan REGISTER NOW

Now there are gyrations particularly with COVID issues flaring in Europe and the US but in the main, the USD is waiting for results or possible ‘non-results’ before defining its next leg.

Here is a genuine question: If you were to trade FX right now how would you do it?

I ask this because what theory suggests and what actuals are doing are not necessarily aligning.

Here is an example:

If the ‘Blue Wave’ scenario played out where Biden took the Oval Office and the Democrats swept the House and the Senate – policy is likely to be highly fiscally stimulative. The third COVID bill of upwards of $2.2 trillion would be released quickly coupled with additional support over the coming 4 years. You then add in a Central bank that is willing to add more support and has the fire power to outpace all other comers you get a picture that is a USD negative.

START TRADING

However, going back to the question above, how would you position to this scenario? This scenario is likely to create asset appreciation, its likely to see confidence and spending recoveries and its likely to attractive investment – that’s a USD positive even with the mass stimulus going into the market.

One could also argue the same point in the other direction, Trump holds the Oval office and the Republicans take the House and Senate. Trump will look to put through some very strong economic pump policies – USD positive.

The real issue is the Senate. Senate Republicans are starting to flex some muscle and are showing signs that they might obstruct policy particularly big fiscal spending. If Biden was to win the Oval office but faced a Republican controlled Senate, the impasse would possibly be a bigger negative than any other combination. The risks involved and the uncertainly it could cause would likely be one of the biggest ‘on the day’ movers of FX markets.

This will be risk personified, and why maybe the Senate is the ‘real’ Election to watch.

For news, webinars, articles and analysis, visit our dedicated US Elections 2020 Page or sign up to our exclusive webinar series.

US Elections 2020
Webinar Series

Register and attend

Episode 1

Tue 29th Sep

7:00pm (AEST)

Market History & 1st Debate

View

Episode 2

Tue 13th Oct

7:00pm (AEST)

Electoral College and Swing States

View

Episode 3

Tue 20th Oct

7:00pm (AEST)

Trading Election Day and Post-Election

View

Episode 4

Mon 2nd Nov

7:00pm (AEST)

Election Day Trading Plan

View

Episode 5

Wed 11th Nov

7:00pm (AEST)

Election Results & Future Impact

Register

  • [VIDEO] Currency Point: Star Spangled Banner, FP Markets
    • Articles
    • Views
    AUTHOR

    FP Markets

    FP Markets is an Australian regulated broker established in 2005 offering access to CFDs across Forex, Indices, Commodities, Stocks & Cryptocurrencies on consistently tighter spreads in unparalleled trading conditions. FP Markets combines state-of-the-art technology with a huge selection of financial instruments to create a genuine broker destination for all types of traders.

    PROFILE
Start Trading with a Global Broker

Archives

Archives

Categories


Start
Trading
in Minutes

Open an account now


[VIDEO] Currency Point: Star Spangled Banner, FP Markets Access +10,000 financial instruments
[VIDEO] Currency Point: Star Spangled Banner, FP Markets Auto open & close positions
[VIDEO] Currency Point: Star Spangled Banner, FP Markets News & economic calendar
[VIDEO] Currency Point: Star Spangled Banner, FP Markets Technical indicator & charts
[VIDEO] Currency Point: Star Spangled Banner, FP Markets Many more tools included

By supplying your email you agree to FP Markets privacy policy and receive future marketing materials from FP Markets. You can unsubscribe at any time.