Events in the United States are unfolding in the worst-case scenario: there is no clear winner in the presidential election, which means that the losing party will appeal the results of the vote in court. In this case, the period of uncertainty may extend for several weeks. Trump has already said that his "victory was stolen" and promised to defend his positions "by all available methods." This suggests that the battle for the top position in the US is just beginning.
The beneficiary of this situation is the US dollar. It is used as the main protective tool – even when paired with the yen, it shows a clear advantage. This is why things are going very well for dollar bulls, which is not the case for the US stock market and emerging market currencies. The surge in risk-off sentiment allows the dollar to strengthen its position throughout the market: for example, the greenback settled in the 16th figure with the euro, the pound-dollar pair collapsed 200 points down, and the dollar-yen pair—on the contrary—is conquering new heights. It is noteworthy that during the Asian session a few hours ago today, the situation was radically different: the US currency was losing its position "on all fronts," reacting to the growth in the number of electors in favor of the democratic leader.
The situation changed when the parties exchanged early statements in which they assessed their chances of winning. Moreover, the first step here was made surprisingly not by Trump, but by Biden. The leader of the Democratic party said that his victory is already close. Once again, Joe Biden made this statement before all the votes were counted: the last polling stations in the United States closed only this morning (Moscow time) and the counting process will continue today throughout the day, and perhaps even longer, considering the "postal vote."
Donald Trump responded to Biden with lightning speed and in a rather harsh and ultimatum form. First, he announced his victory, which he said was "stolen from him." Secondly, he said that he would appeal to the US Supreme Court to determine the "true results of the vote." In his opinion, a "major fraud" is being carried out with the American people. Trump's main claims are related to the so-called "postal vote." Even before the election, he said that these votes may be falsified or partially ignored in the overall standings.
In general, it does not matter what kind of arguments Trump argues for his claims. In the context of the currency market, the very fact that the current President declared himself as the winner ahead of time by announcing lawsuits is important. Since the gap between the candidates is really small, one of the them must enlist the votes of 270 electors in order to win. Joe Biden is leading with 238 electoral votes at the moment, while President Donald Trump is gradually closing the gap by gaining 213 votes.
It is worth noting here that the duration of counting votes in these regions may be different, since the process itself is determined by different procedures that are the prerogative of individual states. In particular, in one of the key states—Pennsylvania—the counting of votes cast in advance begins only after the polls close. That is, at the moment, this state is not displayed in the overall standings, while a victory in this region will give the candidate 20 electoral votes. In other words, if Biden "takes" Pennsylvania, he will almost secure a victory (he will have at least 258 votes). If the incumbent wins there, it will be almost equal to the leader of the Democrats (233 votes). In the 2016 election, Pennsylvania "went" to Trump, playing almost a key role in the victory over Hillary Clinton. It should also be noted that the head of the White House is now leading in most of the disputed states, where the counting of votes is still ongoing. If he wins all of them, he will get 293 electoral votes with the necessary 270.
Of these contested states, more than 80% of the vote has already been counted in Wisconsin, North Carolina, and Georgia—Trump is leading everywhere. This means that he will have 257 electoral votes. In order to cross the key bar, he needs to win at least one of the two States - in the above mentioned Pennsylvania or Michigan. However, only 70% of the votes have been counted so far, so the situation may change. Biden, in turn, can get ahead by "postal voting," the results of which will be 100% appealed to the Supreme Court.
The situation with the by-elections to the Senate is also ambiguous. Currently, the leaders in this race are Republicans, who are literally snatching the lead from the Democrats (47 against 46). But the situation is shaky here: the final alignment depends on the results of elections in 11 States.
Therefore, dollar pairs continue to trade in conditions of uncertainty. Opening any positions—in favor of or against the dollar—is still risky at the moment, including in the context of the euro-dollar pair. The price fluctuates in the 100-point range, reacting to the news flow from the US. Since traders' sentiments change at a kaleidoscopic rate, it is almost impossible to predict the pair's movement vector in the short or medium term. Therefore, it is better to take a wait-and-see position at the moment, and observe the situation in the United States.
