Dollar dips against major currencies
The dollar is being affected by the air of uncertainty regarding the presidential elections which can be seen in its weak performance against all major currencies especially the Australian dollar. The Australian dollar was above the 1.04 mark against the dollar because of stabilized growth. The weak dollar has let the euro to stabilize at 1.28 after euro has fallen for the last three sessions. The USD/JPY pair is trading in the narrow margin of 80 – 80.5 awaiting some major release of economic data. Change is expected after the results of Romney and Obama’s presidential election tonight materialize. The results are expected to create volatility in the market.
France stimulus provides uplift
A stimulus package on the industrial sector declared by the President of France has led to volatility in the EUR/USD pair. Twenty billion euros are expected to flow in the form of tax breaks for the businesses that has served as good news for the largely recession hit euro zone. The EUR/USD pair that was trading near the $1.27 mark retraced back its path to the 1.28 mark and is still showing signs to go further up. The factors affecting the pair include the probable Obama win in the US presidential elections and the much awaited decision on Greece’s austerity package to be decided in the meeting tomorrow. The unions opposing the austerity package have declared a 2 day strike.
Showing positive signs
The USD/JPY pair that had experienced a fall below the 80 mark is retracing its path back to the positive level and was at 80.25 today. The pair is still looking up ahead of the presidential elections. The pair is being held back somewhat because of a weak euro. It is serving as a safe haven for traders who are bearish towards the euro over the slim chances of the approval of the austerity package asked by Greece. The strike of the unions against the package has raised trader eyebrows and hence they are reluctant to invest in the euro. It is the prime reason the yen is still about thirty pips down from what it was on Friday at 80.68.
Slightly up but still unsteady
Crude oil did rise though by a narrow margin on Tuesday. The traders are reluctant to invest too much ahead of the presidential elections. The much expected Obama win would spark more volatility in the oil prices giving them a boost. Romney’s win however would lead to depreciation in the oil prices as his policies for oil are not as loose as Obama’s. The demand for oil is uncertain as the euro zone is weak, stimulus is expected from China and the U.S. economy is getting better by the day. The supply is still hit from the north eastern side of America. About two hundred thousand barrels have been cut short from the normal supply.