Daily Currency Update

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Second wave concerns drive market rates

USD - United States Dollar

Markets continued to trade on global risk sentiment and currency markets were spurred on by fears of a second wave of COVID-19 infections.

The US Dollar Index (US DXY) extended its winning streak into a fourth day, appreciating 0.25% to take it to its highest point since early June. Opening this morning at 97.66 the US dollar, a safe-haven currency, benefited from global risk sentiment souring in the face of a potential second wave of COVID-19 infections. Markets swiftly lost their appetite for risk assets and commodity linked currencies such as the Australian and Canadian dollars.

In related news, existing home sales reports will be released on Monday followed by New Home Sales on Tuesday. Durable Goods Orders will be released on Thursday.

Key Movers

The Great British Pound hit a fresh three-week low to open this morning at 1.2348. Falling around 0.59% on Friday, the Sterling continues to remain under pressure after the Bank of England announced its intent to increase its bond-buying program by £100 billion. The result comes despite a better than expected Retail Sales reading and reports that Brexit negotiations are not nearly as bad as once thought. Nevertheless, a resurgent US Dollar, coupled with further monetary policy easing was too much for the Pound to overcome.

The Australian Dollar enjoyed a day of two halves, first capitalizing on risk-on flows early on Friday before reversing course during the American session. Ultimately, the Aussie rose to a daily high of 0.6912 before falling about 0.12% for the day to close at 0.6835. Opening this morning at 0.6818, the Aussie opens slightly lower on a weekly basis.

Expected Ranges

USD/CAD: 1.354 - 1.362 ▲

GBP/USD: 1.233 - 1.245 ▲

EUR/USD: 1.116 - 1.126 ▼

USD/AUD: 1.447 - 1.467 ▼