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The currency markets are a bit volatile now, led by the US dollar, which won't settle down until the election is sorted out. But Europe and Asia have their own issues as well, so the dollar long-term is fine, says senior currency analyst Alfonso Esparza of OANDA.

Gregg Early: I'm here with Alfonso Esparza, who is the senior currency analyst at OANDA. Alfonso, I wanted to start by asking you about what we're seeing in the currency shifts.

The dollar seems to be weakening, I don't know if that's a factor of QE3 kicking in. The euro is staring to strengthen here. Maybe the dollar is weakening because of the euro. I don't know what the relationships are. The fiscal cliff gets thrown in, and the election. So could you clarify some of these things for us?

Alfonso Esparza: I think you are right that QE3 and the fiscal cliff have had an effect on the US dollar, but I think what we're seeing right now is that the major factor is the elections.

When you have an election, you basically have two people running for the same job, so there's uncertainty of who's going to get the job at the end of the day, which in this case is two weeks from now. So that has affected the US dollar against all the major currencies and emerging markets.

That's not to say that Europe is not without its troubles, or there are really questions about recovery, but the US story is one about soft economic data on one hand and uncertainty on the other. But once that uncertainty ends and we have a president-elect, then we'll start moving forward with the US dollar and it will recover.

Gregg Early: So basically, what we're seeing is the market hates uncertainty, so investors just move out of where things are uncertain in the short term and wait to see what happens. Then the money flows come back in.

Alfonso Esparza: Yes, so we've seen that. That explains a lot of the US side. On the Europe side, we've seen economic uncertainty and softness in terms of some decisions, but the main difference is that they don't have as big shifts as the US, and their institutions have stepped up in terms of statements. They're constantly reassuring.