Dollar Dives As Barack Obama Wins US Election

Dollar drops sharply as Obama is set to win US presidential elections based on latest projections. Strength is seen in European majors against the Greenback and we could probably seen the consolidations in in EUR/USD and GBP/USD that started back in mid-September ending.

Meanwhile, gold is seen staging a strong rebound too as it's back above 1720 level, comparing to the near-term low of 1672.5 made on Monday. The stock markets are not much enthusiastic on the election results though as major Asian indices stay nearly flat. Overall, it's seen that Obama's re-election will ensure the continuation of the ultra-ease monetary policy and as the picture is being cleared, the greenback could stay pressured in near-term.

Greece will now be a major focus on whether the euro could extend its rebound and breakout from recent range. The Greek parliament is set to vote on prime minister Samaras' EUR 18.5b austerity and reform package today, which is a critical condition for the country to receive the EUR 31.5b tranche of bailout funds from EU/ECB/IMF. The package includes a raise in retirement age fro 65 to 67, cuts of 5-10% in pensions, scrapping of civil servant's 13th and 14th month pay, and salary cut on academics, hospital doctors, judges, diplomats and members of the armed forces. The parliament will then convene again o Sunday to vote on the 2013 budget, which targets to have EUR 9b of savings to bring the deficit to 5.2% of GDP in 2013, comparing to 6.6% this year.

RBNZ said in its biannual Financial Stability Report that "a period of further strength remains possible" for the New Zealand dollar, in particular, as "New Zealand's relative growth outlook continued to be perceived as favorable despite the lower terms of trade." It said that the economy "has continued to grow modestly" as credit began to rise again. RBNZ Governor Wheeler said that there is no factors that would lead to major depreciation in the exchange rate in near term. And there is "no easy solution" to depreciate the NZD. Meanwhile, quantitative easing in New Zealand is not something that deserves serious thought.

On the data front, UK BRC shop price rose 1.5% yoy in October. Swiss foreign currency reserves and CPI will be released in European session, together with eurozone retail sales and German industrial production.