Daily Currency Update

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Political maneuvers grab headlines

USD - United States Dollar

Demand for the US dollar continued for a fourth day in a row amid the lead up to the 2020 US Presidential Election.

It was a flurry of political headlines capped by Supreme Court speculation and a stopgap budget deal to avert a US government shutdown. Meanwhile this morning, the, the S&P500 was down a tenth of a percent.

President Donald Trump received Senator Mitt Romney’s support to nominate recently deceased Justice Ruth Bader Ginsberg. The Senator’s move nearly ensured that President Trump can make the appointment prior to the November election.

The US House of Representatives approved a budget that included $21 billion for farms to stabilize their incomes. Food producers, many of whom were already reeling from the US-China trade tensions, have been hit hardest by the Covid-19 pandemic.

As it is, the USD gained strength. EURUSD fell below 1.17 and USDCAD went through 1.33.

Key Movers

The Great British pound drifted near two-month lows on Tuesday as British Prime Minister Boris Johnson revealed further restrictions to tackle a second wave of the coronavirus. The recommendation to work from home if possible and the 10pm curfew on bars and restaurants does not give much hope for an economic recovery. European Union chief negotiator Michel Barnier is expected to visit London today as part of continuing talks on Britain’s exit from the bloc.

The Australian dollar tracked lower through trade on Tuesday weighed down by a shift in risk sentiment. Risk sentiment continues to sour as uncertainty envelops financial markets. The positive markers investors have clung to through the last 3 to 4 months are faltering as hopes for a quick economic rebound fade in the face of reinstated restrictions. Having broken support at 0.7190/0.7200 the AUD is vulnerable to a further downward correction through the short term as sentiment continues to drive direction.

Expected Ranges

EUR/USD: 1.166 - 1.171 ▲

GBP/USD: 1.268 - 1.277 ▲

AUD/USD: 0.709 - 0.717 ▲

USD/CAD: 1.329 - 1.336 ▲