As if there was not enough uncertainty surrounding financial markets, US elections are just around the corner. The US presidential elections 2016 will be held on Tuesday, November 8th.
This has been one of the most controversial pre-campaigns of US history, confronting Democrat Hillary Clinton and Republican Donald Trump
We’d like to help you to be aware of the most important political event of this year, one that will transcend borders and will undoubtedly affect the markets.
The debates
The first debate, held in New York in September, generated great expectations and the two candidates shared the stage for the first time.
The second presidential debate was held on October 9th at Washington University, in St Louis, Missouri. The event generated great expectaitions after Trumps' degrading comments about women were revealed.
Still, there's one more debate scheduled that will face the two candidates:The final debate.
This event will be on October 19th at UNLV in Las Vegas, Nevada and will be moderated by Fox News' Chris Wallace.
US Election 2016: All you need to know just one-click away
How many people can vote?
The US voter turnout is among the lowest in the developed world. Only 42% of Americans voted in the 2014 midterm elections, the lowest level since 1978.
Almost in all the states, anyone above 18 years can vote only if they have registered before to the elections. This was not an easy process in the past, but it has become easier in later years.
It should be noted that in the US, the voting day is not declared as a holiday, in fact, historically it has always been held on the first Tuesday after the first Monday in November.
How does the election process goes?
The president of the United States is elected by indirect suffrage and so is the electoral college who chooses the winner. Each state has a certain number of these "electors" based on their population in the most recent census. When citizens vote for their candidates, they're voting for the electors. In the United States, there are 538 of them and just half of them - 270 - are needed to designate a president.
It’s worth noting that in almost every state (except Nebraska and Maine), the winner takes all and that’s why the swing states are so important in the race to get to the 270 electors.
Which states should we watch?
We have to pay special attention to swing states, the ones that regularly switch to Democrat or Republican between elections.
States like Florida, Ohio, Colorado, Arizona, Iowa, New Hampshire, Virginia, Missouri and North Carolina - according to the Economist Intelligence Unit (EIU) - have the power to swing the election.
This time, another key battleground state could be Pennsylvania, that has voted Democratic for the past six elections but only by narrow margins.
Why are US election important for trading?
With worldwide Central Banks on-hold, investors are eagerly waiting for a fresh catalyst to set the tone across the FX board as beyond the Pound and its Brexit woes, majors are trading range bound.
The second presidential debate will take place this Sunday, October 9th, and analysts believe that it's one of Trump’s latest chances to turn things around, which means markets may show more strong reactions to this one results, particularly believing Clinton won the first.
Anyway, things will be more interesting if Trump wins, as Mrs. Clinton´s victory is hardly expected to affect markets. Trump on the other hand, is a hassle, and risk aversion will likely kick in next week if he wins this time.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Editors’ Picks
EUR/USD flirts with daily highs, retargets 1.1900
EUR/USD regains upside traction, returning to the 1.1880 zone and refocusing its attention to the key 1.1900 barrier. The pair’s slight gains comes against the backdrop of a humble decline in the US Dollar as investors continue to assess the latest US CPI readings and the potential Fed’s rate path.
GBP/USD remains well bid around 1.3650
GBP/USD maintains its upside momentum in place, hovering around daily highs near 1.3650 and setting aside part of the recent three-day drop. Cable’s improved sentiment comes on the back of the Greenback’s irresolute price action, while recent hawkish comments from the BoE’s Pill also collaborate with the uptick.
USD/JPY edges up above 153.50 with all eyes on US CPI figures
USD/JPY appreciates above 153.00 but remains on track for a 2.4% weekly loss. Trading volumes remain subdued on Friday, ahead of the IS CPI release. The Yen remains supported by hopes of a stable government and calls for further BoJ tightening.
Editors’ Picks
EUR/USD: Yes, the US economy is resilient – No, that won’t save the US Dollar Premium
Some impressive US data should have resulted in a much stronger USD. Well, it didn’t happen. The EUR/USD pair closed a third consecutive week little changed, a handful of pips above the 1.1800 mark.
Gold: Metals remain vulnerable to broad market mood Premium
Gold (XAU/USD) started the week on a bullish note and climbed above $5,000 before declining sharply and erasing its weekly gains on Thursday, only to recover heading into the weekend.
GBP/USD: Pound Sterling remains below 1.3700 ahead of UK inflation test Premium
The Pound Sterling (GBP) failed to resist at higher levels against the US Dollar (USD), but buyers held their ground amid a US data-busy blockbuster week.
Bitcoin: BTC bears aren’t done yet
Bitcoin (BTC) price slips below $67,000 at the time of writing on Friday, remaining under pressure and extending losses of nearly 5% so far this week.
US Dollar: Big in Japan Premium
The US Dollar (USD) resumed its yearly downtrend this week, slipping back to two-week troughs just to bounce back a tad in the second half of the week.
RECOMMENDED LESSONS
Making money in forex is easy if you know how the bankers trade!
I’m often mystified in my educational forex articles why so many traders struggle to make consistent money out of forex trading. The answer has more to do with what they don’t know than what they do know. After working in investment banks for 20 years many of which were as a Chief trader its second knowledge how to extract cash out of the market.
5 Forex News Events You Need To Know
In the fast moving world of currency markets where huge moves can seemingly come from nowhere, it is extremely important for new traders to learn about the various economic indicators and forex news events and releases that shape the markets. Indeed, quickly getting a handle on which data to look out for, what it means, and how to trade it can see new traders quickly become far more profitable and sets up the road to long term success.
Top 10 Chart Patterns Every Trader Should Know
Chart patterns are one of the most effective trading tools for a trader. They are pure price-action, and form on the basis of underlying buying and selling pressure. Chart patterns have a proven track-record, and traders use them to identify continuation or reversal signals, to open positions and identify price targets.
7 Ways to Avoid Forex Scams
The forex industry is recently seeing more and more scams. Here are 7 ways to avoid losing your money in such scams: Forex scams are becoming frequent. Michael Greenberg reports on luxurious expenses, including a submarine bought from the money taken from forex traders. Here’s another report of a forex fraud. So, how can we avoid falling in such forex scams?
What Are the 10 Fatal Mistakes Traders Make
Trading is exciting. Trading is hard. Trading is extremely hard. Some say that it takes more than 10,000 hours to master. Others believe that trading is the way to quick riches. They might be both wrong. What is important to know that no matter how experienced you are, mistakes will be part of the trading process.
The challenge: Timing the market and trader psychology
Successful trading often comes down to timing – entering and exiting trades at the right moments. Yet timing the market is notoriously difficult, largely because human psychology can derail even the best plans. Two powerful emotions in particular – fear and greed – tend to drive trading decisions off course.