USD: what if Hilary wins…

In the US someone said that a possible win of Hilary Clinton at the elections, obtained without a democratic majority, could bring to very little movements of the major G10 currencies.

More specifically, now, with decreasing political uncertainties, we may see a US rates recovery accompanied by an equity bullish movement.
In terms of currencies, however, interesting is the relationship with the Japanese Yen, which would function as a hedging tool against Trump risk, and this may lead to an increased vulnerability of the US dollar against the JPY.
Opposite situation with regard to low-yield currencies such as EUR and CHF, which could underperform against the Greenback in relation to the safe haven status that distinguishes them.

Placing a focus on the EUR/USD, it is easy to note that the 1.1200 area continues to be a strong resistance to occasional spikes the drops.

eurusd-04nov

The yesterday’s rally met an initial resistance at 1.1123 (August-September Low) and then descend and climb again with a swinging motion. At the time of writing the cross is trading at 1.1097 slightly down compared to yesterday’s close (-0.07%), while the markets remain calm looking forward to the release of today’s data on Unemployment and Non-Farm Payrolls.

At about 13:30 (Italian time) we expect a gradual increase in volatility, as often happens during events of this importance, so we could see also quite relevant spike and drop.

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