Nov 05 2008
Obama’s Victory Takes the USD Further Up
With a relatively negative news day from United States, which saw US factory orders in September dropping more than three times what was expected, the USD recorded one of its biggest one day slides against the EUR experienced since that currency’s launch. The USD witnessed similar behavior against the Pound and Swiss Franc. The USD did see bullishness as well, as it gained around 100 points against the JPY and closed at 99.60.
The recent unusual price movements have been in response to new market conditions stemming from the global financial crisis that began in September with the bankruptcy of Lehman Brothers Inc. As for today’s election results, which will also affect the U.S market, a victory by Democrat Barack Obama was seen as marginally dollar-positive given he could have an easier time passing his agenda through a Democratic Congress. However, some have said that a surprise win by Republican John McCain would have been just as beneficial. Most are relieved to see this marathon campaign come to an end. But with Democrats expected to increase their majority in Congress, some warned that markets may balk at one party wielding so much power.
Investors may look for the unusual price volatility to continue in the EUR/USD as the pair attempts to stabilize and find new support and resistance lines. Large price jumps such as these are not common place and present terrific opportunities to take advantage of the price swings for large profitable gains.
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