US election on Tuesday

2 November, 2020

Tom Arnold

Last week was a fairly innocuous week on the currency markets, with the major winner being the US Dollar, which managed to shrug off some of the negativity brought bout by election uncertainty and make some strong gains following the 33.1% improvement in its GDP. This was a record number for the US economy and outstripped the Covid drop in GDP seen earlier in the year. In a timely boost to President Trump’s hopes of re-election the US economy showed massive resilience from the awful year Covid has wrought across the globe, giving a 2 cent gain against the Euro and a little over a cent against the Pound.

The Pound managed to make some headway against the Euro – around a cent – as the EU struggled with a resurgence of Covid cases and the announcement of various new lockdowns most notably in Germany and France. There was also some backing for the Pound with continued optimism that a Trade Deal with the EU could still well be on the cards, with rumours abounding that a deal might be close, pending the result of the US election and any resulting influence that might have on the UK and EU stances.

The week ahead could be one of the busiest we have seen for a very long time. We have all of the usual first-week-of-the-month type of data, coupled with the US election on Tuesday and a huge day on Thursday with both UK and US central bank policy statements. Not forgetting Non-Farm Payrolls in the US on Friday and the possibility of progress on the Brexit front too. It is set to be an incredibly volatile week for all of the majors, and given the uncertain nature of many of the different announcements there is no clear expectations – anything is possible!

As a result one of the most commonly used mechanisms we have at Currency Index to protect you from volatility is a forward contract, to allow you to lock in a rate in advance of your requirement, without needing to pay for the whole contract upfront. Removing the risk of this week’s volatility from your upcoming purchase could save you a huge amount if the rates swing the wrong way. Make sure to stay in close contact with your CI consultant, to be kept informed of exactly what is happening and what your options are.

UK Manufacturing PMI
Euro Manufacturing PMI
US Manufacturing PMI

Australian Interest Rate Decision and Policy Statement

UK Services PMI
Euro Services PMI
US Services PMI
US Employment Change

UK Construction PMI
Euro Retail Sales
UK Interest Rate Decision and Policy Statement
US Initial Jobless Claims
US Interest Rate Decision and Policy Statement

UK House Prices
US Non-Farm Payrolls
US Unemployment Rate