EUR/USD exchange rate firms on US election day
The euro US dollar (EUR/USD) exchange rate is edging higher this morning as markets remain volatile ahead of the US’s upcoming election results.
At the time of writing, the EUR/USD exchange rate is trading at around €1.0898, up roughly 0.2% from this morning’s opening rate.
US dollar (USD) stumbles amid US election jitters
The US dollar (USD) is on the back foot against most of its counterparts this morning, as pre-election jitters take their toll on the currency.
With Americans casting their votes today for the next US President, market turbulence is on the rise.
As such, USD investors are likely holding back on making any bold moves, preferring to wait and see before placing significant bets.
Erik Knutzen and Jeff Blazek, co-CIOs of Multi-Asset Strategies at Neuberger Berman, weigh in on the market sentiment:
‘The uncertainty surrounding the control of Congress, particularly the House, could outlast the uncertainty over the presidency. A disputed result could further prolong market volatility by days or even weeks. We’ve been bracing for increased volatility as the election approaches, and this week is expected to see a peak in that turbulence, lasting until a clear outcome emerges.’
Euro (EUR) quiet amid thin trading conditions
The euro (EUR) is struggling to garner investor attention this morning as economic data from within the Bloc is absent from today’s data calendar.
This has seen EUR exchange rates tread water against the majority of its rivals, supported only marginally by a weakening US dollar.
As the ‘greenback’ continus to decline ahead of the country’s election results, the euro is being underpinned thanks to the currencies’ negative correlation.
EUR/USD forecast: US high-impact data in the spotlight
Looking ahead to this afternoon, the primary catalyst of movement for the euro US dollar exchange rate will likely remain centred around high impact events from the US.
Throughout the day, USD exchange rates are expected to remain unpredictable as the election outcome hangs in the balance, with a result anticipated later tonight or early tomorrow morning.
Additionally, the US is set to release the latest ISM services PMI data this afternoon.
If the figures align with the strong performance seen in September, it could provide a modest boost to USD exchange rates.
Turning to the euro, economic data from within the bloc will be absent for the remainder of the day, and as such could see the euro trade in line with market sentiment.
As a safe-haven currency, should this morning’s risk-on flows prevail into the afternoon, EUR exchange rates will likely struggle to catch bids.