Volatile trading continues in the US dollar, sending it to the weakest level in over two years on Thursday as trends point to a lead for Joe Biden in the US presidential elections. At the time of writing, the US dollar index DXY is trading around 93.36.

With no clear winner emerging just yet and President Donald Trump pursuing legal action against vote counting in several states, global markets are in a state of flux due to the political uncertainty in the world’s most powerful economy. Trump’s lawsuits are likely to weaken investor confidence and exert downward pressure on the US dollar in the coming days.

Later today, the focus shifts to the FOMC meeting as well. While traders anticipate no policy change amid the tightly contested elections underway, the committee may hint at possible moves for the future to combat the economic harm of the second wave of infections that have affected parts of the US and other countries.

A victory for Democrat Joe Biden is also likely to keep the US dollar weak as traders expect him to go soft on the US’s trade policy and undo the damage of Trump’s tariffs. This could help strengthen other currencies against the greenback, especially the Mexican peso and the Chinese yuan.