03.11.2020: Market sentiment improves in anticipation of election results (DJIA, USDX, USD/CAD)

Описание: US stock indexes advanced significantly ahead of the announcement of the US presidential election’s results. After yesterday’s spike, the US dollar is now losing steam across the board. The US dollar index is correcting downwards falling below the level of 94. The USD/CAD pair is also losing momentum today.
Futures on the US stock indexes are climbing up as investors are anticipating the results of the US presidential election.
Futures on the Dow Jones gained 1.38%, while futures on the Nasdaq 100 rose by 0.6%. Futures on the S&P 500 were up by 1.15%.
Today market participants will finally learn the results of the presidential election. Democratic candidate Joe Biden is leading the national presidential polls. However, the outcome will largely depend on the results of the voting in swing states.
Investors are also bracing for high volatility if there are no definite election results today. Besides, such an outcome looks possible due to a complex vote counting process or a controversial result.
Many traders are betting on Biden’s victory. If he wins, the stock market is projected to rise dramatically. The large number of economic support programs that Joe Biden promises to implement would help improve the performance of cyclical sectors.
Today, the US dollar is correcting in most currency markets after hitting new highs across the board amid investors' concern over the continuing spread of the coronavirus and reimposed lockdown measures. In particular, the US dollar index, measuring the value of the dollar against a basket of six world currencies, corrected downwards and went below the 94 level, thus retreating from its four-week high reached the day before.
At the time of preparing the material for this video, the US dollar index fell by 0.52% and consolidated at around 93.591.
Today, the US dollar/Canadian dollar pair declined by 0.60%. As a result, at the time of preparing the material, the US dollar was trading at 1.3148 against the Canadian dollar.
The last pre-election day showed the US investors' strong faith in a bright future of their country. Market sentiment improved in anticipation of the election results. On Monday, investors were more optimistic, while today they are cautious. US stock index futures are trading in positive territory. The most favourable scenario for the markets will be a victory for US Democratic candidate Joe Biden. In this case, US foreign policy is expected to be less unpredictable. Besides, there is a chance that the US-China tensions would ease. Trump's victory is likely to come as a surprise to market participants. In such a case, the greenback will hardly continue its downward movement. The most negative outcome for the stock market, which implies a deeper correction, is contested election.

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