The dollar is trimming some of its earlier advance as stocks stay more choppy
EUR/USD is now back up to 1.1700, working its way above the 100-hour moving average at 1.1670. Meanwhile, GBP/USD is back up above 1.3000 after having traded to as low as 1.2915 earlier as buyers now seize back near-term control in the pair.
Elsewhere, AUD/USD managed to keep above its 100-hour moving average to climb to 0.7120 from around 0.7060 earlier in the session, above its 200-hour moving average.
This comes as the dollar is seeing gains ease up a little as the market tries to digest the latest developments in the tense US election race.
As things stand now, there's plenty of attention on the count in Detroit to see if there will be a similar shift in Michigan as we saw with Milwaukee that led to Biden taking a slight lead over Trump in Wisconsin, based on the latest reporting.
I reckon the market is starting to come to terms with the idea that we may end up with a Biden presidency but Republicans will hold the Senate. The gridlock in Washington as such should spell trouble for risk assets and the bond market supports that argument.
Despite the choppiness in stocks and FX, the bond market is relatively unfazed as 10-year Treasury yields are still down by 11 bps to 0.788% today.
That sort of hints that investors are pretty skeptical about stimulus to follow at this stage, with the reflation trade all but fading unless Trump manages to pull an upset.
Either way, if Trump contests the results and the court gets involved, that just ensures more chaos and uncertainty and that also isn't a good thing for risk.
In turn, it is likely to keep Treasuries underpinned through this whole ordeal.
