On Thursday, activity on world markets was expectedly low due to the US investors’ absence because of Thanksgiving Day. Today the trading session will be short due to the continuation of the national holiday.
Trading in the Asian session began with a confident weakening of the dollar against the background of continued heightened interest from investors in risky assets. It seems that the markets don’t pay attention to the mass numbers of coronavirus victims and the economic data, which indicate a recovery in business and manufacturing activity in the United States, still, confirm the weakness of the labor market.
In the US, the transition of power has begun. But Joe Biden will have to face problems that the Republicans will create for him and the Democrats, taking revenge for four years of evil struggle with Donald Trump. Events surrounding the adoption of stimulus measures before the presidential elections show that with a majority with the Senate and broad representation in the lower house of Congress, Republicans will put a spoke in the wheels of Democrats every time. It means that stimulus measures will not be adopted in the wake of the ongoing political struggle, which means that the markets will not receive a new portion of the financial injection and the dollar will not have new reasons to resume its fall against major currencies.
I would like to remind you that earlier, these expectations significantly weakened the rate of the American currency. Vaccine production is still the main driver of growth in demand for risky assets, but it can not support it forever while putting pressure on the dollar.
What to expect soon:
In general, it seems to me that the next week may become a turning point in this matter. It can lead the markets out of the path of blissful cautious optimism by triggering a correction. If the market additionally receives some negative news, the decline will only intensify