Election Ire Unsettles Steady Markets

The greenback initially traded well as markets covered dollar shorts after the FOMC rate decision late Wednesday largely passed alongside expectations. Much of this performance was reversed, however, as President Trump tweeted to suggest delaying November's Presidential election on the grounds of safety: "Delay the Election until people can properly, securely and safely vote???"

The tweet clearly unsettled markets, which responded by selling the USD against all others in G10 as well as by bailing out of US equity markets in favour of US treasuries. As a result, the S&P500 dropped as much as 1.8% in early trade, but this was swiftly reversed as various US politicians including the FEC commissioner spoke out against even the possibility that the election could be pushed back.

USD selling prompted a new cycle high in EUR/USD at $1.1810. Nonetheless, AUD and CAD remained the worst off in G10, as commodities took a leg lower to pressure WTI crude futures below $40/bbl.

Focus Friday turns to China's manufacturing and non-manufacturing PMI, French, Italian and Canadian GDP as well as MNI Chicago Business Barometer data.