Forex Today: Dollar still pressured, coronavirus concerns weigh

Here is what you need to know on Tuesday, October 13:

The greenback appreciated in slow motion at the weekly opening but ended a dull Monday down against most major rivals.

China set the yuan fixing at 6.7126, weaker than expected, while the PBOC lowered the FX risk reserve ratio to zero. The country “unveiled a new comprehensive reform plan for Shenzhen,” giving local authorities there a “more direct and greater say in business” in areas such as carrying out market-based economic reforms.  Asian and European indexes found mild-support in such headlines.

US futures advanced, with the Nasdaq Composite flirting with all-time highs, ignoring the fact that US leaders were once again unable to agree on a coronavirus stimulus package.

The number of new coronavirus cases in Europe continues on the rise. Germany imposed new restrictions, while the UK announced a three-tier system of restrictions for England with Liverpool region under strictest tier 3, which means household mixing will be banned, and all pubs and bars will be closed, alongside other indoors leisure centres. The lowest level, that covers most of England, includes a curfew for pubs at 10 pm and limited household mixing.

BOE’s members were on the wires this Monday, with Haskel saying that the central bank keeps an “absolutely open mind” on the suitability of negative rates. Governor Bailey added later that they are not thinking about negative rates in terms of a policy decision now, also indicating that they are not near addressing whether they should use them.

The EUR was the worst performer against the greenback, with EUR/USD stuck to 1.18. The Pound advanced despite discouraging local news, with GBP/USD nearing the 1.3100 level.

Gold remains stable above $1,920 a troy ounce amid limited trading. Crude oil prices edged lower, on news that production resumed in Libya’s largest oilfield.

Credit: FX Street

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