WILL THE DOLALR KEEP DECLINING?
Global equities rallied to a record high amid optimism about the outlook under a Joe Biden presidency. The dollar extended declines.
Last week’s embrace of risk continued Monday after Biden was declared the winner of the U.S. election over the weekend. S&P 500 futures rose about 1.5%, building on the strongest week since April for the benchmark, as the president-elect launched his transition effort. Contracts on the tech-heavy Nasdaq 100 index, which have outperformed since Tuesday’s vote, were up more than 2%.
Gains were broad-based in Asia and European stocks opened higher. The yuan and euro rose alongside the Australian and New Zealand dollars. Treasuries were steady and oil pared some of Friday’s slide. Turkey’s lira surged after the installment of a new central bank chief.
FX Overnight News:
- Democrat candidate Joe Biden took the 270 electoral college votes required for victory in the U.S. presidential race on Saturday by winning the battleground state of Pennsylvania, seemingly putting to an end a tight and highly-charged election.
- President Donald Trump, the first incumbent to lose a re-election bid in 28 years, has not conceded so far, but will find it difficult to overturn the results with allegations of voting fraud that have so far not gained traction in any court.
- Republicans appear to have retained control of the Senate, though the final makeup may not be clear until runoff votes in Georgia in January.
- Europe also has Brexit to deal with, as the Nov. 15 deadline for a trade deal between Britain and the European Union draws ever closer. Major differences over the so-called level playing field rules for business and access to British fishing waters still exist.
- Oil prices surged Monday, with Biden’s victory in the U.S. presidential race buoying risk appetites as traders look for a larger coronavirus relief package, offsetting worries about the impact on demand from a worsening pandemic.
FX Overnight Volatility:
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November 9, 2020