Friday October 23rd, 2020

The US$ is set for a weekly loss as markets remain focused on US fiscal stimulus and US election developments. House Speaker Pelosi said negotiations were making progress with the White House administration and that legislation could be hammered out “pretty soon”. As global Covid-19 cases approach 42mio, the US FDA broadens the scope of its authorized uses for Gilead remdesivir as a covid-19 treatment. US$ remains under pressure down 1.2% month today, down 7.5% over 6 months. Asian currencies are up 0.2% on average, with CNY up 0.1%. Trading currencies ZAR is flat, JPY is up 0.1%, NZD & MXN are up 0.3%, while AUD & NOK are up 0.5% vs US$. Alongside US Stimulus developments, US Markit manufacturing PMI, Services PMI will provide intraday direction to the markets.

Oil prices hold steady as markets anticipate OPEC output cuts will offset falling global demand. In Canada, the Province of Albert is ending curtailments on oil output as of December. C$ is holding steady below 1.3180 finding support from US stimulus hopes and firm oil prices. The ending of Albert oil output limits will provide some short-term support to C$. Intraday US Stimulus developments remains the key market driver. Support 1.3080, with resistance at 1.3180. 

Eur strengthens amid a weaker US$ and better than expected German Manufacturing PMI. German Manufacturing expected at 55.1 came out at 58, as well EUR Market Manufacturing PMI also beat expectations. Investors remain focused on US Stimulus news which is US$ negative-Euro positive, this will remain the primary driver for Euro direction. Support at 1.1750, with resistance at 1.1900.

GBP remains firm as Brexit hopes continue to drive investor buying. UK / EU entered into renewed/intense Brexit negotiations, with the main stumbling block remaining UK’s sovereignty over fisheries. UK Markit Service PMI fell below expectations, while Manufacturing PMI came out better than expected. All in all, its Brexit Brexit Brexit, a positive or negative result will have a significant impact on GBP volatility. Support 1.2820 with resistance holding at 1.3080.