US Dollar Safe-Haven Demand Limited despite Global Political Uncertainties

Pound News: Sterling Gains Limited despite Brexit Hopes

The Pound attempted to advance today, on hopes that UK-EU Brexit relations were improving and a deal was within reach.

However, uncertainty persists and the Pound’s appeal has been limited, due to a lack of solid optimistic developments and fears of new Covid-19 restrictions as cases continue rising.

The next key UK ecostats will be trade and growth figures, due on Friday. Until then, the Pound’s movement will continue to be driven by potential Brexit developments.

Euro News: Euro Benefits from USD Weakness

The Euro gained today on its negative correlation with the US Dollar, which remains weakened by market uncertainty, and the Pound’s limited appeal due to a lack of Brexit developments.

The weakness of the Euro’s rivals offset worrying German industrial production data this morning, which surprisingly fell to -0.2% on the month in August.

Meanwhile, the Euro could be sensitive to any dovish signals from the European Central Bank (ECB) meeting minutes, while German trade data due for publication tomorrow may also weigh on EUR as it is expected to narrow.

However, shifting market sentiment and the strength in the US Dollar will likely drive Euro movement.

US Dollar News: Anticipation for Political Developments Keeps a Lid on Safe-Haven Demand

The US Dollar slipped slightly today as markets responded to Donald Trump halting a more comprehensive US stimulus package that was in negotiations in Congress this morning, but the White House later hinted at some economic aid on a more piecemeal basis.

This left the US Dollar lower, and market sentiment cautiously up ahead of the release of the Federal Open Market Committee (FOMC) minutes and tonight’s US Vice-Presidential debate.

Although analysts don’t expect any big surprises, increasing uncertainty in US politics will be in focus ahead of the 2020 US Presidential Election next month, stoking volatility in USD exchange rates.

Canadian Dollar News: Higher Oil Prices and Risk-Sentiment Boost CAD

The Canadian Dollar strengthened today as markets continue to calm from this week’s chaotic US political news. Added to this, the Canadian Dollar is also benefitting from higher prices of oil, Canada’s biggest export.

Canadian Dollar movement will remain sensitive to oil prices in the coming sessions while investors will also be closely watching tomorrow’s speech from Bank of Canada (BoC) Governor Tiff Macklem.

Australian Dollar News: AUD Resilient despite RBA Bets

Bets of a more dovish Reserve Bank of Australia (RBA) failed to prevent AUD gains today. Calmer markets meant more investors were willing to take risks and buy risk and trade-correlated currencies like the Australian Dollar.

No notable Australian data is due for publication tomorrow. This will leave the Australian Dollar sensitive to shifts in global market sentiment, with US political developments and global coronavirus news the main catalysts.

Upcoming Data

Thursday, 8th October

07:00    German Trade Balance

13:15    Canadian Housing Starts

13:30    Bank of Canada Governor Macklem Speech

13:30    US Jobless Claims