Forex Today: Markets remain on edge on US election day

Here is what you need to know on Tuesday, November 5:

Financial markets remain on edge as the US presidential election takes center stage, with latest polls pointing to a tight race. On Tuesday, the US economic calendar will feature Goods Trade Balance data for September and the ISM Services PMI report for October. Later in the day, the US Treasury will hold a 10-year note auction. 

The TIPP poll has Donald Trump and Kamala Harris tied at 48, the Ipsos poll has Harris leading by 2 points, 50 vs 48, and the Atlas Intel poll has Trump having a one point lead, 50 vs 49, as per RealClearPolling. In some swing states, such as Arizona and North Carolina, Trump seems to be staying on top, while Harris seems to have closed the gap in others, such as Nevada, Georgia and Pennsylvania. Experts think that it might take at least a few days before there is a clear winner. In the meantime, US stock index futures trade marginally higher in the European morning and the US Dollar Index fluctuates in a tight range slightly below 104.00 after closing deep in negative territory on Monday.

The Reserve Bank of Australia (RBA) announced on Tuesday that it left the policy rate unchanged at 4.35%, as expected. In its policy statement, the RBA reiterated that the policy will need to be sufficiently restrictive until the board is confident that inflation is moving sustainably towards the target range and added that they do not see inflation returning sustainably to the midpoint of the target until 2026. In the post-meeting press conference, RBA Governor Michele Bullock noted that they remain ready to act if the economy were to turn down more than expected. AUD/USD gained traction following the RBA event and was last seen trading in positive territory at around 0.6600.

During the Asian trading hours, the data from China showed the Caixin Services PMI improved to 52 in October from 50.3 in September. This reading came in better than the market expectation of 50.5.

EUR/USD climbed to its highest level in over two weeks above 1.0900 on Monday but erased its gains to close the day flat. Early Tuesday, the pair moves sideways near 1.0880.

GBP/USD met resistance near 1.3000 after opening the week with a bullish gap and went into a consolidation phase. At the time of press, the pair was fluctuating in a narrow channel slightly above 1.2950.

USD/JPY holds steady above 152.00 in the European morning on Tuesday after posting losses on Monday. 

Gold failed to make a decisive move in either direction and ended the day virtually unchanged on Monday. XAU/USD stays relatively quiet to begin the European session and remains below $2,750.