Futures on the US stock index jumped sharply as investors got a chance to react to Joe Biden’s victory announced by a number of news organizations. The US dollar index declined, reaching its lowest level since early September. The USD/CAD pair is on the edge of the downtrend line.
Today is the first trading day on the stock exchanges after traders have learned the final results of the US presidential election. Futures on the major US stock indexes soared up amid Biden’s projected victory. Optimism in the equity market was fueled by the statements made by Pfizer and Biotech. They said that their experimental vaccine was more than 90% effective in preventing COVID-19.
Futures on the Dow Jones Industrial Average jumped by 4.53%, while the S&P 500 index rose by 3.64%. The NASDAQ Composite Index advanced by 2.01%.
Traders welcomed the news on the outcome of the US presidential election. Although there has not been an official announcement of the results, the media has already declared Joe Biden’s significant advantage in votes and victory.
The euphoria in the US markets is quite expected as the political uncertainty is likely to ease soon. In light of the rapid spread of the coronavirus and the unresolved issue of a new stimulus package, even the slightest “certainty” about the elected President boosted market sentiment.
In addition, the new head of the White House will hardly be able to undertake major reforms in the near future due to the current disagreements in the US Congress. Analysts note that this is the almost perfect time for American markets, since US policy is unlikely to face any dramatic changes.
Amid the euphoria taking over the markets, the US dollar index lost ground, reaching its lowest level since the beginning of September. At the time of preparing the material for this video, the US dollar index, measuring the value of the dollar against a basket of six world currencies, was trading at 92.43.
The US dollar/Canadian dollar pair fell by 0.74%. At the time of preparing this material, the greenback was trading at around 1.2946 against the loonie.
Following the supposedly announced results of the US presidential election, investors have turned euphoric and they seem to ignore some aggravating circumstances. One of them is the current political uncertainty as Joe Biden has enough votes to be declared the new president of the United States, but there has not yet been an official announcement, as required by law. Moreover, Donald Trump does not want to give up and he intends to shift the outcome of the election. This, in turn, affects the adoption of additional measures to support the national economy. Besides, the lack of a vaccine against the coronavirus also suggests that the current euphoria is not fully justified and it is likely to fade soon. Therefore, traders should be careful when making any trading decision.
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