The Euro remains tightly rangebound above parity against the US dollar as we enter today’s trading session while market participants await the results of US elections which in many districts at the moment are too close to call.
According to the latest results, Republicans currently have 47 seats and Democrats have 46 seats in the Senate. The party with 51 seats, in the end, will have control of the Senate. On the other hand, Democrats have lost 3 House seats and currently have 159, against 190 seats by Republicans. 218 seats are needed to gain the majority in the House.
The Euro now has risen sharply over the last 3 days since hitting a bottom of 97.40 and was further helped yesterday by bullish remarks from several ECB board members.
European Central Bank (ECB) policymaker Joachim Nagel noted yesterday that large rate hikes are still necessary for the eurozone, and ECB Vice Vice President Luis de Guindos noted that quantitative tightening will start "sooner or later," helping the Euro remain firm against the US Dollar.
There was also some positive economic news out of the Eurozone yesterday with Retail Sales improving to -0.6 percent YoY in September versus -1.3 percent expected and much better than last month’s figure of -1.4 percent. The US NFIB Small Business Optimism Index for October also performed well coming in at, 91.3 versus 92.1 prior.
Looking ahead today, there is not much in the way of economic news to drive the EUR/USD currency pair and September Wholesale Inventories will be the only data featured in the US economic docket and it's not expected to trigger a noticeable reaction ahead of Thursday's key inflation report.
The main focus of the currency pair will be the US midterm elections and especially as we head into the US trading session where the end results will become clearer.