Index Looks to US Data for a Lift
The US dollar index barely shifted yesterday as it closed 0.14% lower.
Remaining above the 93 handle was significant as Goldman Sachs, JP Morgan, and Citi beat earnings forecasts.
The index is also reacting to the recent election poll data.
A Trump re-election would mean more deregulation and lower taxes. However, it would also mean more trade conflicts between the US and China.
On the other hand, a Biden victory would mean higher taxes for companies and more regulations. Reports also state that Biden has managed to raise almost a billion dollars in two months.
Later today, the dollar index will react to the US jobless claims data and manufacturing index numbers.
Renewed Coronavirus Concerns Weigh on Sentiment
The euro ended Wednesday’s session indecisively as the eurozone’s industrial recovery almost stalled in August.
The slowdown will be detrimental as we are now in full swing of a second wave across the continent.
France became the next nation to impose restrictions as it declared a state of emergency. Eight major cities will enforce a lockdown between 9 pm and 6 am from Saturday.
As infections rise close to 100,000 per day, Italy recorded its highest daily increase in infections since the beginning of the pandemic.
Pound Mixed as Volatility Remains
Sterling shrugged off Brexit concerns as it closed 0.59% higher yesterday.
The original deadline date brought further questions amid uncertainty over a trade deal.
Boris Johnson recently stated that a deal was ‘all there’, and it is now up to the EU to push it across the line.
We now await EU leaders to finish their summit discussions on Friday, before deciding the UK’s next steps.
Indices React to House Talks
US indices finished in the red on Wednesday. Healthcare and consumer stocks were among the worst performers.
More doubts were cast on a fiscal stimulus deal before the election, which is a mere 20 days away.
Treasury Secretary Steven Mnuchin said Democrats and Republicans ‘still remain far apart’ on a deal.
Gold regains $1900
Gold found some footing yesterday as it closed 0.53% higher, regaining its stamp above $1900.
However, it failed to recoup mid-week losses as investors continue to favour the greenback over stagnated fiscal talks and a steep rise in pandemic infections.
API Data Lifts Oil
Oil jumped over 2% on Thursday as it penetrated the $41 barrier.
API data reported that crude oil inventories fell by 5.4 million barrels last week, compared with the expected figure of 2.8 million barrels.
We now await the EIA stock change tonight for further indications if oil can reclaim recent highs.