The U.S. dollar was seen retreating from its two-month high on Wednesday, ahead of the US Presidential Election results. The market was speculating over the outcome of the presidential election, however, according to some polls, Obama was marching ahead in several of the US states and finally, he managed his victory for the second term. On the other hand, the Aussie dollar gains in the market following the steady RBA (Reserve Bank of Australia) rates at home.
The US dollar index shifts lower by 0.1 pct. sliding to 80.622. On Monday, the currency’s index was at 80.843. On the other hand, the euro jumps back to $1.2800 after its two-month low of $1.2764. The Greek voting and the ECB policy meeting are supposed to trigger this euro boost.
Traders however think that the market is giving hopeful signs to strengthening the euro following the Greek parliament’s approval of their government’s new austerity measures that are aimed at securing financial aids from the foreign lenders. On the other hand, the US Presidential election can be behind the dollars somehow downward movement. However, many Currency Analysts feel that the market was more open to an Obama victory and his re-election will boost the currency’s position in the market.
Besides Obama’s victory, the European Central Bank meeting is also a key development this week that the market analysts are focusing on. The ECB meeting becomes even more important with respect to the fact that Spain is yet to take some concrete measures to initiate its bailout process. However, the Greek development has added some positive market sentiments.
Amidst all ups and downs, the Australian dollar gained the status of the best performing market currency this week. The AUD witnessed a 0.7 percent gain, claiming its five and half week high position at $1.0447. The Reserve Bank of Australia maintained its steady interest rates to trigger the growth in the currency. However, interest cuts are not ruled out in the near future. The Australian dollar hits a six-month high versus the yen to reach at 84.04 yen, whereas the euro falls to its two-month low of AUD 1.2236.
Markets have been positive about the outcomes of the Nov. 6 ECB meeting. However, the market is relying more on the meeting that is expected to take place early next year. According to the currency analysts, the ECB meeting scheduled for the next year may bring more policy initiatives to trigger a much desired growth to the euro and will stabilize its market position.
The release of the Australian employment data is expected to become another major factor supposed to strengthen the AUD in the market. The data will be released on Thursday, followed by the Friday release of the data on China, which is the single biggest export market of Australia.
However, the outlook for the global economy is going to reasonably affect the position of the major market currencies. The major events like Obama’s re-election and ECB policy initiatives will largely decide the market movements this week.