06 Nov 2024
The US Dollar on a tear, with more than one-percentage gain against most major peers.
Former US President Donald Trump secured over 270 electoral votes needed to become the next US president.
The US Dollar index trades above 105.00, the highest level since early July.
The
US Dollar (USD) keeps surging into the US session on Wednesday after
former US President Donald Trump secured enough electoral votes to
become the next US president. The former US President has secured 277
votes, more than enough to surpass the magic 270 threshold needed to
secure a majority. An additional element that might result in more US
Dollar strength is the fact that the Republicans have secured a majority
in the Senate. While the race to control the US House of
Representatives is still undecided, it looks like Trump will not be a
lame-duck president and will have support from both institutions when it
comes to passing laws.
The US economic calendar is very light
on Wednesday. It looks like traders will be able to further assess and
focus on the outcome of the US presidential election. Besides the
Mortgage Bankers Association (MBA) weekly Mortgage Application numbers,
nothing special is expected on the economic data front.
Daily market movers summary: Numerous assumptions in play
As
of this writing, former US President Donald Trump has obtained 277
electoral votes, surpassing the 270 required for victory. In contrast,
Vice President Kamala Harris trails with only 224 votes.
On
Thursday, the Federal Reserve is scheduled to hold its monetary policy
meeting and announce its policy rate decision. Market participants are
anxious to see if Fed Chairman Jerome Powell will provide any insights
or implement changes to the monetary policy in light of Trump's
potential return to the presidency.
Asian markets have been
negatively impacted, particularly in China, due to impending tariffs
once Trump assumes office next year. Meanwhile, European and US markets
are experiencing upward momentum.
The CME FedWatch Tool indicates a
97.5% likelihood of a 25 basis point interest rate cut by the Federal
Reserve during Thursday's meeting. Notably, the meeting on December 18
is projected to have a 68.4% chance of a 50 basis point cut from the
current rate, reflecting market expectations for reductions this week
and in December. Prior to the election results, the probability stood at
80%.
The US 10-year benchmark yield is currently at 4.45%, approaching the previous high of 4.46%.