Greenback Elevated on Equity Sell-Off
US indices faced a fresh sell-off on Monday as renewed coronavirus fears and a stagnant stimulus package took their toll.
Bank shares fell following a report that JPMorgan Chase and Bank of New York Mellon (amongst others) had defied anti-money laundering (AML) rules.
This weighed on sentiment as indices recorded a third straight weekly drop.
In addition, the US imposed more sanctions on Iran to curb Tehran’s nuclear threat. However, the United Nations will not support reimposing sanctions as they ignored Washington’s intentions.
The Dow fell 1.84%, with the S&P dropping 1.16%. The Nasdaq lost 0.13% before ending the day slightly positive.
Investor focus shifted to the US index as it soared 0.7% in yesterday’s session, its biggest daily gain this month.
EU’s Belarus Sanctions In Doubt
The euro closed 0.56% lower on Monday as the EURUSD pair fell below the 1.18 handle.
The euro was hit as talks of imposing sanctions on Belarus came to a halt. The EU’s credibility was at stake as Cyprus prevented them from reaching unanimity on the issue.
Cyprus vetoed sanctions on Belarus, due to the EU’s inaction against Turkey’s disputed gas exploration in the eastern Mediterranean Sea.
Theresa May Attacks ‘Reckless’ Brexit Bill
The pound finished 0.82% lower yesterday as the continued sell-off from the beginning of the month continued.
The Brexit fallout continued as former Prime Minister Theresa May weighed in on the controversial internal markets bill. She said it could not be supported as it would break international law and would damage trust in the UK.
The FTSE 100 suffered its worst plunge since June amid dire warnings of more pandemic restrictions.
Parliament will meet today to discuss if further lockdowns will be necessary.
Gold Touches $1900
Gold fell by nearly 2% on Monday, at one point dropping below the psychological $1900 handle.
The strong US dollar was evident against the yellow metal as monthly gains were wiped out.
The commodity could regain its early week losses in the next 24 hours. This comes with news on further economic concerns over fresh coronavirus-induced restrictions in many parts of Europe.
Over Supply Adds to Oil Slide Concerns
Oil closed just above the $40 mark as it fell over 2% yesterday.
The dent in the oil market came as expectations that Libyan crude will return to the market. This comes at a time when weak demand is evident.
The Gulf of Mexico is still recovering from back-to-back hurricanes, following Hurricane Laura in late August and Hurricane Sally last week. As of yesterday, 8.36% of the region’s oil production remained closed.