Daily Currency Update

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Slide continues for US dollar

USD - United States Dollar

The US dollar continued its downward trend overnight, when it reached a 7-day low against the euro, the pound, the Australian dollar and the Canadian dollar.

EUR/USD broke through 1.19 this morning and GBP/USD touched 1.323. The swing was spurred by COVID-19 concerns. Over 5.4 million people have tested positive and the death toll surpassed 170,000.

Risk appetite improved after US Commerce Secretary Wilbur Ross said that Chinas was buying large amounts of US agricultural products ahead of the phase-one trade deal review. Concerns remain over the trade deal.

Attention now turns to the Federal Reserve Bank's Federal Open Market Committee meeting minutes due tomorrow. Having maintained the status quo investors will be seeking any sign the Fed is preparing to amend its policy platform, particularly an adjustment to average inflation targets. A dovish review will likely add further pressure on the already embattled dollar.

Key Movers

Sterling remained range round through much of Monday as investors brace for more volatility ahead of new trade talks between the UK and EU. Main topics of discussion include Fisheries’ rights and the UK’s financial sector's access to the Unions markets. Officials are racing to find a compromise before the end of 2020 when the UK will be set adrift from the common market, relinquishing all preferential trade agreements. Unless a deal can be struck Sterling faces significant headwinds.

The Australian dollar surged back through 0.72 US cents through trade on Monday, lead higher following a jump in equities and an improvement in risk sentiment. Having struggled to break above 0.7170 through much of the domestic session the AUD rallied overnight touching intraday highs at 0.7225. A continuation in US dollar weakness was the primary driver as softer than expected regional.

Expected Ranges

EUR/USD: 1.185 - 1.196 ▼

GBP/USD: 1.309 - 1.324 ▼

AUD/USD: 0.72 - 0.726 ▼

USD/CAD: 1.315 - 1.323 ▼