MARKET UPDATE OUTLOOK: Forex, Commodities and Indices [Friday, November 5, 2024]

*MARKET UPDATE ASIA SESSION*
Forex, Commodities and Indices
Tuesday, November 05, 2024
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US stocks fluctuated between gains and losses on Monday, as investors prepared for a crucial week in which Americans will elect a new president and the Federal Reserve will release its policy statement.

The presidential election saw candidates Donald Trump and Kamala Harris jostle for the lead on the final day of a race that polls show is extremely tight. It could take days to determine a winner.

The US dollar weakened on Monday as investors pulled out of the so-called “Trump trade,” which has profited in recent weeks from speculation that former Republican President Donald Trump is more likely to win Tuesday’s presidential election against Democratic Vice President Kamala Harris.

Harris has won some polls, although overall they show a tight race.

Trump’s policies on tariffs and immigration are seen as likely to fuel inflation, which would push longer-dated U.S. Treasury yields and the dollar higher.

Gold prices were steady near $2,740 an ounce on Monday after two straight sessions of declines, supported by a weaker U.S. dollar, and as markets braced for the upcoming U.S. presidential election and a Federal Reserve policy decision. Speculation that a second term for Trump as president would fuel inflation through expansionary fiscal policy and higher tariffs had recently prompted investors to hold gold as a hedge against longer-term inflation risks. However, expectations have eased as opinion polls have shown a tight race between the two presidential candidates.

The U.S. Dollar Index (DXY) broke below the 104.00 support and hit a fresh two-week low amid growing caution ahead of the U.S. election on Tuesday. The next data due in the U.S. is the ISM Services PMI, the final S&P Global Services PMI and the API’s weekly report on U.S. crude oil inventories.

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