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Dollar Dropped as Polls Open

FOREX

The dollar is uniformly weaker on election day, with the greenback sliding sharply as global equities rally alongside Treasury yields. With polling booths due to open, early voting indications are for particularly high turnout, with markets appearing to price further the chances of a Biden victory as the results trickle through after the close. Betting markets look slightly more contentious, with Biden holding an implied chance of around 60% of victory.

AUD initially underperformed, sliding against all others in G10 as markets responded to the RBA's rate cut and expansion of stimulus. The Bank coupled the trimming of rates to 0.1% with a further A$100bln in bond buys, and tweaked forward guidance to indicate no rise in rates for the coming three years. AUD/USD was sold down to $0.7028, but the subsequent USD drop prompted a 1 cent rally in the pair ahead of NY hours.

Haven currencies are soft, with JPY and CHF weak, while NOK, AUD and GBP notch decent gains.

The data calendar is of little consequence, with just a speech from ECB's Knot on the speaker slate.

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