Daily Update - 17th November 2020
Yesterday’s Focus Yesterday’s Explained The dollar dropped and the euro and British pound gained on Monday as the week began in an upbeat mood after strong data out of Asia and on hopes for a successful vaccine against COVID-19. Despite fears of a resurgence of global cases of COVID-19, hopes remain optimistic and there is hope for a working vaccine that could rescue the global economy, helping to fuel a rally in stock markets and a rebound in riskier currencies. Signs that Britain and the European Union might make progress negotiating a post-Brexit trade deal also encouraged investors to take on more risk. Against a basket of currencies, the dollar softened 0.2% to 92.573 The euro rose 0.3% to a one-week high of $1.1868 while currencies sensitive to global sentiment such as the Australian dollar notched up solid gains. In particular as the positive news about vaccine developers are providing a glimmer of hope at the end of the corona tunnel the FX market is likely to prefer an active fiscal reaction over inactivity. If the end of the pandemic is foreseeable the tactic of pushing the European economies over lockdown with the help of fiscal policies makes sense again to FX traders. Sterling rallied to as high as $1.3242 before settling at $1.3219, up 0.1%. Against the euro, the pound was down marginally at 89.75 pence. Hopes for a compromise in talks between London and Brussels over a trade deal for after their Brexit transition period were given a boost after Dominic Cummings, the most powerful adviser to Prime Minister Boris Johnson and a eurosceptic, left Downing Street. This topic remains an uncertain catalyst. The market needs to be cautious that prices could fluctuate nervously on news. Today’s Market Today’s Explained For the EUR and GBP, it’s a particularly quiet day ahead on the economic calendar. A lack of stats will leave updates on Brexit talks and COVID-19 to influence the day. On the monetary policy front, ECB President Lagarde and BoE Governor Bailey is due to speak later today. Any guidance on monetary policy will influence. Across the Pond, it’s a relatively busy day ahead for the U.S Dollar. October retail sales and industrial production, and September business inventory numbers are due out. Expect October’s retail sales figures to be the key driver on the day, with consumption key to the economic recovery. Dire labor market conditions and concerns over the economic outlook are likely to pin back spending near term. Away from the economic calendar, chatter from Capitol Hill and COVID-19 news updates will continue to influence. Market risk sentiment and COVID-19 news updates will remain the key drivers on the day. Foreign exchange is more than just numbers. Along with our great rates of exchange, you'll also enjoy the dedicated assistance of our friendly currency dealers. Speak to an expert today! Call - +971 22 045 200 Or Request a call back at your convenience - https://www.delma-exchange.com/request-a-calback
