Daily Currency Update

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Consumer confidence has dropped in October, making the Greenback vulnerable.

USD - United States Dollar

The Conference Board's Consumer Confidence measure has declined from an upward-revised score of 126.3 in September to 125.9 in October; however, it came below expectations of 128 points. The U.S. dollar index trades flat this morning. Given that market expectations are rigid regarding expected outcomes from the Fed in the U.S. and the BoC in Canada tomorrow (the Fed would cut its rate 25 basis points and the BoC would keep its rate at the same level), it would take a significant surprise to provoke a large change in the U.S. dollar and its most important crosses. In the short-term, the volatility will continue to be slightly elevated. Still, it is the same for the major currencies one day before the two North American central banks release their monetary policy results. Additionally, the Bank of Japan will also release its monetary policy results tomorrow.

Yesterday, the U.S. dollar index fell after the S&P 500 hit all-time high following President Trump’s statement that the U.S. might reach a trade pact sooner than expected. He added, "we are looking probably to be ahead of schedule to sign a considerable portion of the China deal.” However, the British pound was outperforming and the yen bringing up the rear.

Key Movers

The British pound trades flat this morning after Labour leader Jeremy Corbyn changed positions since yesterday, after rejecting Prime Minister Boris Johnson's call for an election on Dec. 12th. The Labour leader is now saying that his party's lawmakers would vote in favour of an election in a new vote in the House of Commons later today. Yesterday, the British pound outperformed the U.S. dollar after Boris Johnson failed again in his bid to trigger an early election, with the House of Commons voting down his motion (the third of its kind). However, Boris Johnson will try again later today to get Parliament to allow a snap vote. Still, this time he needs only a simple majority because he is using an easier legal route by proposing a one-line bill, changing the date set in law for the next election to be on Dec. 12th.

The Aussie dollar is the best performer this morning, rising 0.7 percent against the Kiwi dollar, 0.6 percent versus the U.S. dollar, 0.51 percent versus the Loonie, and 0.8 against the yen. The key driver of its performance is more positive news about the U.S. - China trade deal.

Expected Ranges

USD/CAD: 1.3032 - 1.3102 ▲

EUR/USD: 1.1092 - 1.1111 ▲

GBP/USD: 1.2842 - 1.2924 ▲

AUD/USD: 0.6842 - 0.6875 ▲

NZD/USD: 0.6323 - 0.6355 ▼