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EUR/USD has been holding onto its gains as markets are following the US elections. The Nonfarm Payrolls and the dovish Fed decision are in play and may continue weakening the dollar, Yohay Elam, an Analyst at FXstreet, reports.

See – Nonfarm Payrolls Preview: Forecast from five major banks for October jobs report

Key quotes

“The count in the US elections continues with Democratic nominee Joe Biden in pole position to win the presidency. The former-Vice President has taken the lead in Georgia, which is set to go down to the wire. Biden also leads in Nevada and Arizona, with the latter somewhat moving toward President Donald Trump. The incumbent is ahead in Pennsylvania but that is narrowing.”

“At the moment, markets are betting that a clear outcome is only a matter of time, but that there would be a peaceful transfer of power. The safe-haven dollar may extend its falls if the picture becomes clearer for Biden, and it could gain if the elections become contested.” 

“The greenback is on the back foot due to the relatively dovish decision by the Federal Reserve. The world’s most powerful central bank said that the pace of the recovery has moderated and added that it discussed its bond-buying scheme. Jerome Powell, Chairman of the Federal Reserve, expressed concern about the resurgence of coronavirus in the US and abroad. He also urged lawmakers to act.” 

“COVID-19 cases continue rising on both sides of the pond and could weigh on EUR/USD later on, once the dust from the US elections settles.” 

“The Nonfarm Payrolls report remains of high importance. Expectations stand at an increase of around 600,000 positions, an enormous gain in pre-pandemic times, but moderation in comparison to the job restoration in previous months. A miss in the NFP could be seen as increasing the chance of more QE from the Fed. That could boost stocks and further push the dollar lower.”