US election results continue to roll in, with the Democrats faring slightly better than expected, although both chambers are still up for grabs.
Equities were pricing in a gridlocked government – historically a positive outcome for the stock market – but with the red wave looking like a ripple, the indexes closed significantly down.
Turmoil in the risk-on cryptocurrency sector surely didn’t help.
That was good for the US Dollar Index though, which closed above 110 having added 0.74%.
There has been a slight pullback to 109.94 this morning.
Cable dipped 1.6% as a consequence; at the time of writing the pair is trading at US$1.137, and could potentially dip further to support at US1.115.
GBP/USD awaits election results and US CPI data – Source: capital.com
EUR/USD has (just) managed to stay above parity despite closing 60 pips weaker yesterday having failed to break through the US$1.001 point- which is where resistance last stepped in on October 27.
Euro’s position will be influenced by the US year-on-year inflation rate due this afternoon.
Inflation is expected to moderate slightly from 8.2% to 8.1%, but any hawkish indications from the Federal Reserve (which would be likely if inflation runs hotter than hoped) could see the greenback gain.
Sterling ceded a percentage point in the EUR/GBP pair yesterday, which is now changing hands at a four-week high of 87.97p.