NVDA Q3 Earnings Alert: Why our AI stock picker is still holding Nvidia stockRead More

FOREX-Dollar steadies ahead of debate but set for weekly loss on stimulus hopes

Published 2020-10-22, 08:50 p/m
© Reuters.
EUR/USD
-
GBP/USD
-
USD/JPY
-
USD/CHF
-
AUD/USD
-
NZD/USD
-
DX
-
USD/CNH
-

* U.S. dollar creeps higher in Asia, but on track for poor week

* Graphic: World FX rates in 2020 https://tmsnrt.rs/2RBWI5E

By Tom Westbrook

SINGAPORE, Oct 23 (Reuters) - The dollar took stock at the end of a poor week on Friday, having shed about a cent against the euro and suffered its largest weekly drop against the yen in a month, as investors began to wager on a Biden presidency and big U.S. stimulus.

Daily moves were slight and mostly in the dollar's favour early in the Asia session as traders awaited the final U.S. presidential debate, which begins at 0100 GMT.

Markets could be sensitive to any vote-shifting moments as campaigning hits fever pitch ahead of polling day on Nov. 3.

The dollar has lifted from Wednesday's seven-week low against a basket of currencies =USD , but still sits about 0.8% lower for the week and in the bottom half of a monthslong range.

Persistent hopes that Congress might pass a stimulus package before the election and confidence that spending follows anyway, no matter who gets elected, has driven a selloff in the bond market in anticipation of more government borrowing. US/

The dollar has been sold through the week because the prospect of stimulus has supported investors' mood and their appetite for riskier currencies instead, while underlying caution has also given the safe-haven Japanese yen a boost.

"If we do get through and Biden wins and he pushes on with stimulus, then we're back in to a negative U.S. dollar, risk-on, positive for Aussie and kiwi kind of story," said Westpac currency analyst Imre Speizer.

"But for now there's still a bit of a political risk overhang," he said.

The risk-sensitive Australian dollar AUD=D3 inched 0.1% higher early on Friday and is about 0.7% firmer this week, with further gains capped by a growing expectation that the Reserve Bank of Australia will cut rates when it meets in November.

The New Zealand dollar NZD=D3 slipped 0.l% Friday after softer-than-expected inflation data, but has gained almost 1% for the week. Japanese yen JPY= dipped overnight after U.S. House Speaker Nancy Pelosi said there was progress in stimulus talks, but it is about half a percent higher for the week and has ground nearly 3% higher since April.

The euro EUR= has gained 0.8% this week, though pulled back overnight as COVID-19 cases surge in Europe.

British, European and U.S. Purchasing Managers' Index figures are due later on Friday.

Sterling GBP= slipped overnight on uncertainty over Brexit outlook, but it is up 1.2% this week and is clinging on above $1.30 thanks to hopes that Britain and the European Union can reach a trade deal before a transition period ends on Dec. 31.

In offshore trade the Chinese yuan CNH= hovered just short of a more than two-year high hit earlier in the week. CNY/

Analysts said the debate may not move markets immediately, but that political uncertainty over the election meant for a risky environment.

"There may be verbal fireworks but we expect no material impact on the dollar," said Commonwealth Bank of Australia currency analyst Kim Mundy.

"We continue to see a high risk that the election outcome is delayed or contested," she said, adding to near-term downside risks for the Australian dollar.

========================================================

Currency bid prices at 8:19AM (019 GMT) Description

RIC

Last

U.S. Close Pct Change

YTD Pct

High Bid

Low Bid

Previous

Change

Session

Euro/Dollar

EUR=EBS

$1.1795

$1.1819

-0.20%

+5.21%

+1.1823

+1.1792 Dollar/Yen

JPY=D3

104.8450

104.9250

+0.00%

-3.39%

+104.9300 +104.9300 Euro/Yen

EURJPY=

123.66

123.93

-0.22%

+1.40%

+124.0100 +123.6600 Dollar/Swiss

CHF=EBS

0.9087

0.9072

+0.18%

-6.08%

+0.9090

+0.9072 Sterling/Dollar GBP=D3

1.3063

1.3083

-0.13%

-1.49%

+1.3086

+1.3062 Dollar/Canadian CAD=D3

1.3148

1.3139

+0.08%

+1.22%

+1.3149

+1.3125 Aussie/Dollar

AUD=D3

0.7118

0.7118

+0.01%

+1.45%

+0.7139

+0.7115 NZ

NZD=D3

0.6665

0.6675

-0.13%

-0.94%

+0.6678

+0.6659 Dollar/Dollar

All spots FX= Tokyo spots AFX= Europe spots EFX= Volatilities FXVOL= Tokyo Forex market info from BOJ TKYFX

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.