Market Update: 5 November 2020
The pollsters once again seem to have missed the beat of the American populous, as the US Presidential Election remains undecided and voting has been incredibly tight. However, it appears a Biden victory is more likely with Sports Bet already paying out on that basis. Trump is unlikely to “go quietly into the night” and will instead try and litigate his way to the White House. Consequently, we expect markets to remain volatile in the days ahead. In the case of a Biden Presidency, the Republicans will likely still control the Senate leaving the US political system in relative gridlock unless compromises can be reached. Markets are in the meantime taking comfort in that a Republican Senate will protect the Trump tax cuts.
As previously stated our AUD/USD medium term view was agnostic to the election result and we continue to favour AUD outperformance with a move above 0.7500 expected to unfold early in 2021.
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