Thursday, October 29

Forex Today: Risk-off, Brexit, and a pinch of hope

Here is what you need to know on Monday, September 28:

Coronavirus concerns continued to weigh upon risk sentiment and backing a dollar’s rally. The American currency closed the week higher against all of its major rivals. EUR/USD traded as low as 1.1611,  settling not far above the level. The escalation in the number of coronavirus cases through all Europe and the announcement of restrictive measures in several countries will likely continue to pressure the shared currency.

The GBP/USD pair held above 1.2700, amid renewed hopes for a Brexit trade deal. The EU and the UK will start their ninth round of talks this Tuesday, the final stage of Brexit trade talks ahead of the EU summit that will take place in Brussels in mid-October. CBI head,  Carolyn Fairbairn,  said during the weekend that a trade deal  “can and must be made.”

On Saturday, President Donald Trump on nominated Amy Coney Barrett to the Supreme Court, which will boost a conservative majority. The Senate needs to approve the nomination, which will probably result in increased tensions between Republicans and Democrats.

On Friday, Wall Street closed in the green, amid renewed hopes for a coronavirus aid package in the US, after  Treasury Secretary Steven Mnuchin and House Speaker Nancy Pelosi have agreed to restart formal talks towards a new economic relief bill.

The market sentiment, however, remained sour, amid a continued increase in coronavirus cases in the North Hemisphere after Summer ended. France, Spain and the UK have announced fresh restrictive measures as numbers skyrocketed last week.

US Treasury yields remained depressed near weekly lows.

Gold consolidated for a second consecutive day on Friday, ending the week with losses at $1,861 a troy ounce. Crude oil prices found support in rising equities, WTI settled at $40.00 a barrel.

Credit: FX Street

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