- The euro consolidates above 1.1700 after a volatile session.
- Biden takes the lead in the vote count and boosts market sentiment.
- The US dollar remains steady as hopes of a large fiscal stimulus vanish.
The euro is consolidating around 1.1720 on the late US session after having bounced at 1.1600 lows on early trading on Thursday in a volatile market after the US closed the polls.
Euro set to a moderate daily advance
The common currency plunged about 160 pips on the early Asian trading when the first results of the US elections negated the blue landslide anticipated by the opinion polls and Trump claimed victory. The ensuing rush for safety, with the investors closing risky bet,s boosted the US dollar to one-month highs against a basket of currencies.
The greenback’s rally lost steam during the early European session, with market volatility ebbing and equity indexes turning positive. The brighter market sentiment has buoyed the euro’s come back, pushing the pair back above 1.1700 to pst a tight daily appreciation.
News reporting that Biden takes the lead on key states like Wisconsin, Michigan and Nevada has been welcomed by the market, contributing to Wall Street’s strong rally. Dollar’s retreat, however, remains limited as the likelihood of a split Congress hinders Democrat’s plan to approve a large stimulus program.
Regarding the economic calendar, the market has largely ignored the US ADP employment report, which has shown a 365K increase on private payrolls in September, against the expectations of a 690K increment.
Technical levels to watch
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