EUR / USD stabilizes around 1.1720 after bouncing from 1.1600

• The euro consolidates above 1.1700 after a volatile session.
• Biden takes the lead in the vote count and increases market confidence.
• The US dollar remains stable as hopes for a big fiscal stimulus fade.

The euro is consolidating around 1.1720 at the end of the US session, after having bounced off the lows of 1.1600 in early trading on Thursday, in a volatile market after the US closed the polls.

The common currency sank around 160 pips in early Asian trading, when the first US election results negated the so-called “blue wave” anticipated by opinion polls and Trump again claimed victory. The ensuing race for safe havens, with investors closing risky bets, propelled the US dollar to month-long highs against its main competitors

The dollar rally lost steam during the first European session, with market volatility waning and stock indices turning positive. Better market sentiment has driven the euro back, pushing the pair back above 1.1700 to give a tight daily appreciation.

Election results keep financial markets on edge

The news reporting that Biden is taking the lead in key states like Wisconsin, Michigan and Nevada has been well received by the market, contributing to the strong rally on Wall Street. However, the dollar’s pullback remains limited as the likelihood of a split in Congress hampers the Democratic plan to pass a major stimulus program.

Looking at the economic calendar, the market has largely ignored the US ADP employment report, which has shown a 365,000 increase in private payrolls in September, against expectations of a 690,000 increase.