2016-11-02 11:17:40

Unexpected discovery that a candidate for the US presidency Hillary Clinton used personal email address for official communication has created imbalance in the financial market and undermined positions of the USD. At the same time demand for the safe-haven assets, such as gold, the yen, the franc has increased.

Latest results of a public opinion poll in the USA showed that 44.5% of people is ready to vote for Hillary Clinton and 45.2% of voters is for Donald Trump.

It is difficult to predict the outcome of voting in the United States and investors prefer safe-haven assets.

If the outcome of the election increases imbalance in the market, the US Fed may refrain from the interest rate hike in December. In this case the USD will weaken in the market.

Gold cannot compete with the other relatively safe assets, if the cost of borrowing is increasing, as it does not bring interest. If rates remain low, the demand for gold steadily grows.

On Tuesday, positive U.S economic data was released, which showed that ISM index of business activity in the manufacturing sector was 51.9 against the forecast of 51.7 in October. Markit index of business activity has reached annual highs of 53.4 in October.

Nevertheless, strong US data hardly supports the USD. Investors' attention switches to the US presidential election, which will be held on 8 November.

Future economic policy in the USA, positions of the USD and the situation in the US stock market will largely depend on the outcome of this election.

Traders’ attention today will be focused on the interest rate decision by the US Fed, which will be published at 21:00 (GMT+3). It is unlikely that the rate will be raised today, as it is obvious that the Fed will refrain from any actions before the presidential election.

However, market participants will monitor the rhetoric of the Fed’s leaders in order to understand future plans of the US Central Bank receive some signals about monetary policy tightening in future.

Today at 15:15 – US unemployment rate in the private sector for October will become known (ADP report.) Usually, this date has a strong impact on the market and the price of the USD; however, it has no direct correlation with Non-Farm Payrolls. It is expected that unemployment rate will be at the level of 165 000, a month ago it was at the level of 154 000.XAU/USD: Demand for gold has increased.  Fundamental analysis for 02/11/2016