The U.S. dollar rose higher in early European trading on Friday. The outcome of the controversial US presidential election remains unknown today. In addition, the possibility of a legal fight will also lead to prolonged uncertainty. It is not good for the overall market situation.

The Dollar Index tracking the greenback against six other currencies was reported to be up as much as 0.1% at 92.537. Meanwhile, EUR/USD also rose by about 0.1% to 1.1838. However, USD/JPY fell 0.1% to 103.44. Other currencies are still volatile until now.

An example is risk-sensitive AUD/USD. The pair fell as much as 0.2% to 0.7269. Now market conditions are more influenced by the wait for vote counting of election results. For information, the two presidential candidates have been competing closely until now.

The Official Results of The Election Have Yet to Be Decided

The U.S. presidential battle was still undecided as of Friday morning. However, Joe Biden as a candidate from Democratic was reported win from several quick counts.  For information, some important states are still counting their votes and some have already completed them.

Legal challenges made by Trump for vote counting in Nevada, Pennsylvania, Georgia, and Michigan have so far not had too much influence. Trump also questioned the credibility of this year's election. He was dissatisfied with the results shown so far.

According to him, if the votes are counted valid, then he will win easily. Trump is also rumored to be taking a legal path if he is to lose this year's election. Of course, this caused a lot of controversy in the community that could affect the market.

Market Reaction to The American Election

Forex markets have been showing a reaction to recent US election news. The reaction was seen by selling the currencies most exposed to global recovery efforts. Many market participants also decide to buy USD and JPY. This was delivered by ING analyst Chris Turner. 

Some of the pre-planned prospects, at least smaller fiscal stimulus, are among the factors contested by both presidential candidates. It is given the condition related to covid-19 that has not yet improved. Many hope that this fiscal stimulus can be realized quickly.

Uncertainty about the U.S. economic recovery from the pandemic also increased. This is the case along with the growing number of Covid-19 cases in the country. It was also buoyed by Wednesday's labor data and early-Thursday jobless claims. Both are quite disappointing. 

This situation places on the October nonfarm payroll data which will be due at a later date. It is expected that this condition will show a slight slowdown in job creation in the community. However, the right efforts and strategies are needed.

Monetary Policy from The Fed 

The Federal Reserve reportedly continued to maintain its monetary policy and was unchanged on Thursday. However, Chairman Jerome Powell stated that there is more fiscal and monetary support needed as rising cases of coronavirus undermine the outlook for economic recovery.

Elsewhere, GBP/USD reported a fall of 0.1% to 1.3138. The currency fell lower after rising rapidly on Thursday. This situation was supported by the Bank of England deciding to increase its bond-buying program with a very positive objective ahead.

They do it to try and support the country's weakened economy. Most of these countries are experiencing poor economic conditions due to the coronavirus pandemic. A wide range of solutions and assistance is also needed for improvement. 

EU Internal Market Commissioner Thierry Breton on Friday said there was only a "50/50" chance that the UK and EU would be able to reach an agreement on the terms of the UK's exit from the EU. Many things need to be discussed.