Jobs Report Bolsters Greenback, But For How Long?
The US Index managed to close up 0.25% towards the 93 handle yesterday.
However, demand for the greenback seems to be fading from the start of the week. After hitting a weekly peak last Friday on the back of the US jobs report, the US index has shown some signs of exhaustion.
The dovish stance the Fed is adopting with fiscal stimulus talks could keep the pressure on the dollar. Added to that the ongoing coronavirus pandemic and the political uncertainty ahead of the US Presidential elections could weigh further.
Euro Awaits ECB Press Conference
The euro continued its fall on Monday closing 0.28% lower. This confirmed a fifth consecutive decline against the dollar.
Sentiment continues to shift as the ECB ponder a further cut in the forecast for inflation. This week’s meeting could announce a reduction in the target of just under 2%.
UK Threatens to Walk Away
The pound was the weakest USD rival yesterday, closing 0.69% down below the 1.32 barrier.
Ahead of a new round of Brexit talks this week, differences remain on fishery and state aid.
The threat of a no-deal Brexit loomed, as UK PM Johnson stated if a deal is not reached by October 15, Britain will accept no deal and move on.
How much will the pound be worth after post-Brexit talks?
US Indices Look to Congress
The US indices mostly ended yesterday’s session positive as they try to recoup the sell-off at the back end of last week.
With jobless claims on a downward heading, some US politicians have little incentive to arrive at any sort of new stimulus deal.
The stocks had been well supported by the potential Fed liquidity. However, sentiment has quickly shifted as the slow but sure recovery seems to be on its way.
Risk Appetite Ready to Shift With Ongoing Tensions
Gold ended Monday’s session indecisively as it closed just below $1930.
US-Sino tensions remained elevated on the back of President Trump’s Labour Day speech. The announcement of a permanent drop in trade between the US and China added to the unrest.
With two months to go until the election date, could we see the yellow metal bounce towards record highs again?
WTI Drops for a Fourth Consecutive Session
WTI closed 1% lower yesterday as it heads towards £39.
Growing fears among oil traders of further surges related to the pandemic remain highly likely.
With the recent Labour Day weekend, concerns were raised of a further rise in Covid-19 cases due to the lack of social distancing.