US Election: Getting granular
President Trump’s hopes of winning in the crucial battleground states of Pennsylvania, Michigan and Wisconsin have taken a blow following another surge in coronavirus cases. This is likely to focus voters’ attention onto Trump’s handling of the pandemic, rather than his plan to reinvigorate the economy. Joe Biden currently holds a commanding lead in all three states meaning the President will likely have to sweep the sunbelt states of Florida, Arizona, North Carolina and Georgia to stand a chance of victory. In four of the past five Presidential elections, Florida, with its 29 electoral college votes, has been decided by less than two percentage points. Is will come as no surprise if the nations perennial drama-queen state has a massive role to play come November 3rd.
Meanwhile, US media companies, which hold a key role in calling victories in individual states, have vowed to contradict the President or challenger if they tried to declare an early election victory. A cocktail of factors will make vote counting more uncertain than previous elections, meaning a clear winner might not be announced for days after the polls close. One-week implied volatility for the Euro/Dollar currency pair has risen to its highest level since mid-June, with markets expecting larger than average currency swings next week.
If you'd like to take proactive steps to manage your FX risk or requirements during political uncertainty, you can speak to one of our Dealers by calling, 020 3465 8200.