FxPro Financial Services Ltd | Nov 05, 2020 04:52AM ET
The winner of the US Presidential Race is still uncertain, and vote count continues. Both Trump and Biden say they are on their way to victory, but this confrontation promises to escalate into lawsuits and further counting of votes. The same, nose-to-nose race is taking place in House and Senate elections.
The fact that investors are buying both bonds and equities indicates a frame of mind for a prolonged confrontation between politicians in the coming weeks, leaving the central bank as the last line of defence for the economy.
The Federal Reserve will hold its next meeting today, where investors hope to see the readiness of the regulator to help the economy if necessary. Investors are not waiting for such steps from the Fed today but assume that they will hear hints of easing in December, as in the case of the ECB. Earlier this week, the Reserve Bank of Australia lowered the rate and expanded QE, today the Bank of Japan and Bank of England both announced expansion of their QE programs.
These actions by other central banks are helping the dollar not to look so weak, acting alone with the Fed's massive quantitative easing. At the same time, these measures work to reduce the value of money and support prices for other assets such as stocks and commodities.
The FxPro Analyst Team
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