Dollar slumps after Joe Biden’s win

Gulf Today Report

The dollar reached a 10-week low on Monday as investors spent on trade-exposed currencies foreshadowing an easy money policy following Biden’s win.

The fall of the dollar index has advanced other currencies. The Chinese yuan struck a 28-month peak, the New Zealand dollar rose 0.6% to hit a 19-month high and the Australian dollar made a seven-week top.

Democrat Biden emerged as the president-elect. The Senate though seems to still be under the control of the Republicans. The January runoff votes in Georgia will determine the final outcome of the Senate.

Michael McCarthy, CMC Markets’ chief strategist said from a market point of view, the outcome is perfect. 

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The possibility of more gridlock means that the hope for a large fiscal stimulus package has been lowered.

On the other hand, the yuan which was eagerly waiting for the election results based on assumption that Joe Biden will take a softer route concerning trades with China has jumped to 6.5758 per dollar.

RISKS REMAIN

Selling of dollar was held in check due to pandemic worries and Donald Trump has refused to concede after losing the election.

Also, as fresh cases of coronavirus increases and countries are putting up stricter restrictions, traders are being as careful as possible.