The US dollar index is moving lower as the country’s election picture remains unclear. Today also sees a Federal Reserve interest rate announcement.
The latest development in the election has been the calling of Michigan and Wisconsin for Joe Biden. This means that Biden is closer to a win but Donald Trump is launching a bid to take the matter to the Supreme Court which could drag the process out further. Investors will be wary of being caught in the volatility and support is still being seen for safe havens such as gold.
Today also sees the latest interest rate and monetary policy announcement from the U.S. Federal Reserve. The market is not expecting any movement from the Fed on rates and it’s probably unlikely that they will make any change to their recent asset purchase trajectory. This outcome is even more likely with the election stalemate and a continued surge in virus cases in Europe and the U.S.
For the dollar index, it will probably remain on the backfoot for the rest of the week. Biden may declare a win but we will have to see what moves the Supreme Court makes on the vote situation. Irregularities are being questioned in Wisconsin and Michigan, where State Republican Tristan Cole said of the latter:
“There is no way that we flipped from 62 percent Trump in 2016 to upside-down this time around,”
The situation will continue to rumble on into the weekend and it is unclear whether we will get a result until next week, while some warn it could be weeks.
Dollar Index Technical Outlook
The dollar index was pushing the 94.00 level but it crashed lower below 93.50 and the 50-day moving average, before attempting to bounce back yesterday. The index looks bearish and may move to the 92.60 level. The Investing Cube team is currently available to help all levels of traders with the Forex Trading Course or one-to-one coaching.
Dollar Index Daily Chart