US Election: Too many hypotheticals

We could sit discuss all the different potential dynamics that will take place over the next week or so, but realistically, none of them will matter if swing-state polling is strong enough for Joe Biden on election night. Clearly, that’s a big ‘if’, but it all boils down to a question of certainty or uncertainty, both of which will have a dramatically differing effect on markets.

It’s fairly well established that certainty is likely to have a negative effect on the US Dollar as investors lean towards more risky assets, hence, a ‘Blue Wave’ of Democratic victories might lead to comfortable Dollar depreciation post-election night. However, just about any other scenario, and there are many, brings uncertainty into the equation. Under these circumstances, the appetite of traders and investors will likely lean heavily toward safe-haven assets, resulting in broad-based US Dollar demand. 

We are extending our hours throughout the US Election period. If you'd like to take proactive steps to manage your FX risk or requirements, you can speak to one of our Dealers by calling, 020 3465 8200. To speak to our team, please call +44 (0)20 3465 8200.