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US dollar hits two-year lows

USD - United States Dollar

The value of the US dollar declined further yesterday and overnight while equity investors drove stock markets higher.

Renewed interest in a US fiscal stimulus package gave new legs to the market to run higher. As such, investors aren’t purchasing US treasuries, therefore weakening demand for the US dollar.

The lack of demand for the dollar pushed EURUSD above 1.21, a two and a half year high. GBPUSD just about touched 1.35 this morning (1.3499). AUDUSD climbed through 0.74. USDCAD dropped another third of a percent and fell below 1.29.

Key Movers

The euro remains a benefactor of global risk appetite. Also news that there could be final approval of the EU pandemic bonds package in the coming days, which will pump much needed economic stimulus across the bloc.

Michel Bernier and David Frost continued Brexit discussions in London around the final parts of a deal. Limited updates have come out of the summit, suggesting that we could be at the very final stages before a deal is announced. However, to pour cold water on the pound, Bernier did state on Monday in front of EU ministers, that the union was willing to walk away from the negotiations if the parties could not agree to favorable terms. The news pushed GBPUSD temporarily lower towards, but the resilient pound has already regained ground.

The AUD advanced back toward 0.74 US cents on Wednesday, shrugging off Tuesday’s underperformance amid broader US dollar weakness and a stronger than anticipated uptick in Q3 GDP growth. With little of note on today’s domestic docket, attentions turn to Friday’s US non-farm payroll print and the broader risk narrative as catalyst driving direction into the weekly close. Markets appear reluctant in extending beyond the current resistance handle, seeking a new catalyst before driving gains toward 0.75.

Expected Ranges

EUR/USD: 1.209 - 1.217 ▼

GBP/USD: 1.334 - 1.349 ▼

AUD/USD: 0.739 - 0.744 ▼

USD/CAD: 1.287 - 1.294 ▼