As the race for the White House went down to the wire, investors remained worried about the prospect of a contested result.
The knife-edge election and the prospect of an acrimonious legal battle to determine the winner.
Republican President Trump and Democratic contender Biden both claimed they were on course for victory. Trump went further, claiming falsely that the election was being “stolen” from him with millions of votes still uncounted.
Trump won the battlegrounds of Florida, Ohio and Texas, dashing Biden’s hopes for a decisive early victory. But the contest will not be decided until a handful of states finish vote counts in the next hours or days. Further, the former vice president said he was on track to winning the race for the White House by taking three key Rust Belt states.
Biden was also back as a favourite to win the election in online betting markets after he overtook Trump in the state of Wisconsin.
Investors have said they favour a definitive, fast resolution to the election. That would clear the way for a deal on a stimulus package to help the damaged domestic economy. Analysts have also said the market will be comfortable with a clear Trump victory. A Biden victory had been expected to boost prospects for a large U.S. fiscal aid package and lessen trade war tensions.
For now, traders have put aside the Britain-European Union trade negotiations. However, both sides recommended a new round of talks on Brexit begin in London this weekend.
Britain was focused on its future trade ties with the United States. An excellent UK-U.S. trade deal can be done, and good progress has been made in reaching one
START TRADINGForex – The race for the White House tightens
Investors eyed U.S. election results amid growing hopes that the worst of the volatility related to the event has passed. Uncertainty about the result left markets in wait-and-see mode.
The dollar rose as much as 1.2% overnight to hit more than one-month highs.
The Canadian dollar edged lower against its U.S. counterpart on Wednesday after a tight U.S. election. Loonie was trading 0.3% lower at 1.3174 to the greenback.
Riskier currencies such as the Australian dollar fell more than 1% overnight. But during the European session, the greenback lost some ground, and riskier currencies recovered.
EURUSD had flipped to positive on the day, up 0.1% at $1.17385.
Sterling fell more than 1% against the U.S. dollar on Wednesday as investors sold riskier currencies. Against the dollar, the British currency fell more than 1.1% to $1.2915 in early London trading. The day before that, it had jumped to $1.3140, its highest in two weeks.
Sterling also weakened 0.6% versus the euro at 90.25 pence.
Oil prices rose on Wednesday but pared earlier gains after President Trump falsely claimed victory in a tight U.S. election.
Gold pared losses after sliding over 1% on Wednesday as the dollar steadied. Spot gold had inched down 0.1% to $1,906.80 per ounce. U.S. gold futures were flat at $1,909.70.
PLEASE NOTE The information above is not investment advice.
Sources: Reuters, Investing, CNN money