This US election was mainly focused on the economical side but each side of the contenders chooses a different approach to deal with the economic situation.
Mitt Romney has opposes the Federal Reserve's extensive policies, including quantitative easing, under which the Fed buys bonds held by banks, pumping the economy full of liquidity to depress borrowing costs to spur recovery.
Romney has also proposed cutting taxes and eliminating regulations approved under President Obama in the last four years.
Both sides tried to address the “Fiscal cliff” issue- nearly $600 billion worth of spending cuts and tax increases that will be automated impose if the congress couldn’t came with a compromise between Republicans and Democrats. This $600 might push the straggling economy back into a recession.
On the other side of the Atlantic, on Monday, European Union Commissioner said that the euro zone was on track to make a decision on unlocking Greece’s next installment of financial aid at a finance ministers meeting next week.
Uncertainty kept the market direction less as investors buying and selling until a winner is announced, with fears rising that a close race could end up in a recount lasting several weeks similar to the 2000 election.
In the meanwhile, markets eyed Wednesday’s parliamentary vote in Greece on new austerity measures required for Athens to get its next round of international aid. Greece doesn’t have a choice in the matter and they must approve the new austerity in order to get the aid even with the price of another government fall.
EUR/USD The euro was trading close to a two-month low against the U.S. dollar on Tuesday, as investors remained cautious ahead of the U.S. presidential election and a Greek parliamentary vote on an austerity bill needed to secure the next tranche of aid.
Greek uncertainty increased the demand for safe-haven assets like the US dollar, German two-year government bond, which now offers yields below zero for the first time in two months on Monday and for benchmark 10-year U.S. Treasury yields which fell to 1.684%
The technical’s for the euro indicates that if the asset closes bellow the 1.2750 mark, it will soon move strait down to the 1.25 area as no major support seen between this 2 marks.