AUD/USD: Drilling Down Potential Outcomes US Elections & Scenarios For AUD/USD – Credit Agricole


The US election is less than a  week away. What impact can the election have on AUD/USD?

Here is their view, courtesy of eFXdata:

Credit Agricole CIB Research discusses the potential outcomes for the coming US elections and the related scenarios for AUD/USD.

1. A disputed election: here we use the 2000 disputed election between Al Gore and George W Bush as a template. AUD/USD was significantly higher three months after the 2000 election, but that was only after a significant dip amidst the political uncertainty generated by the disputed outcome. The easing of this political uncertainty led to a subsequent rally in AUD/USD.

2. A blue wave: we think that Democrat control of the White House, Senate and House of Representatives would be less market-friendly than a Donald Trump presidency and would thus weaken the USD and be subsequently positive for the AUD,” CACIB note.

“3. Gridlock, in the form of one of two possible outcomes:  Republicans keep the White House and Senate; Democrats keep the House…This would be bad for the AUD

Democrats take the White House and keep the House; Republicans keep the Senate: this would be a friendlier outcome for the AUD as it would again lead to a less confrontational approach to US trade with China,” CACIB adds.

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Kenny Fisher - Senior Writer A native of Toronto, Canada, Kenneth worked for seven years in the marketing and trading departments at Bendix, a foreign exchange company in Toronto. Kenneth is also a lawyer, and has extensive experience as an editor and writer.