Obama Wins but Dollar Falls!
The dollar rates went down with President Obama reassuming the White house office and continuation of Federal Reserve quantitative policy.
As the uncertainty over the results is over, stock market and risk prone currencies have risen up. The Australian dollar and Canadian dollar rose to its peak of seven and three weeks respectively.
The dollar was found struggling against many currencies e.g. DXY at 80.545 and euro at $1.285. The euro, due to the Greek Parliamentary Voting on austerity measures, had to face the selling pressure.
According to the Head of European currency strategy, Iam Stannard, the end of uncertainty in U. S. Presidential election will help the pro-cyclical currencies, but will last for a very short duration due to the situation in Greece and Spain.
Initially the market reacted positively to the U. S. Presidential election result considering the Republicans stand against the Reserve’s quantitative easing policy. As a result of keeping the rates intact by Reserve Bank of Australia, the Australian dollar climbed to $ 1.0480.
It was not largely expected that the riskier currencies will be climbing up due to the U. S. fiscal problems. Usually as the market hit the recovery stage, investors buy the riskier currencies.
The dollar has gone down in front of even yen at 79.81 Yen. According to the Morgan Stanley analysts, there are very rigid strategies for maintaining dollar to yen ratio, and it is believed that dollar will gain back against the yen very shortly.
It is expected that now that U. S. elections are over, the Eurozone will draw the attention of the investors. Euro is on its way back to the top in all the chart indicators. With the Greece situation improving with time, the position of Euro will be strengthened. Though the market is keenly interested in Spain’s stand on seeking international aid, this could have an adverse effect on Euro.