Tue 2nd Nov: Markets weary as the race intensifies

The dollar was seen edging higher, as markets preferred to cut short positions just ahead of the US elections. A strong data release from the US assisted the dollar in its progress against the major crosses.
An improvement in the personal income figures to 0.3%, and an increase in consumer spending to 0.6%, paved way for dollar to gain despite the cloud darkening regarding the US elections. A stronger show of consumer spending and increase in core PCE index, 1.5% showed that inflation remained stable, reiterating possible rate hikes in the FOMC meet on the 10th.
The euro slid as oil prices cooled off and good consumer spending figures. Traders will remain cautious ahead of the US elections and an unlikely rate hike decision from the European Central Bank. The single currency finds support at 1.2670, with resistances starting from 1.2770 levels.
The yen too retreated ahead of the elections and should find support at 107.20 with resistances at 105.75.
The sterling moved in tandem with the euro, lower to the 1.8320 levels. The currency outlook remains shaky as chances of an increase in rates remain bleak as data from the UK is still shrouded in uncertainty. Expect the markets to remain cautious as the US elections intensify, with the possibility of the dollar strengthening as traders unwind positions.