Buck Back as Safety Asset as World Worries
The U.S. Dollar is trading in stronger ranges all across the board, with the exception of JPY, following a turbulent weekend that once again put the worldwide economic recovery we have seen since June in peril.
Indeed, COVID-19 is not going away, but rather is making a comeback in Europe with fears that the change in seasons will only exacerbate a second wave that could turn deadly.
Places like Italy and Spain are trying to do all that can be done to guarantee safety without another lockdown with only essentials. European and Asian equities, the most since July, as experts brace for what may become dwindling data figures in the midst of restrictions to travel and business. Additionally, uncertainty over Brexit and tensions between China and the U.S. do not make good ingredients for any good market sentiment.
The election and campaigning in the U.S. are likely to intensify between now and November after the passing of U.S. Supreme Court Justice Ruth Bader Ginsburg, which places major importance on the candidacy for her replacement and voting on approval.
Meanwhile, Treasury Secretary Steve Mnuchin and Federal Reserve Chairman Jerome Powell are to meet to discuss the possibilities of bigger stimulus/recovery expenditures. We will also monitor any news in regard to a scandal over the weekend about North Korea laundering major funds through banks in our hemisphere.
What to Watch Today…
- No major events scheduled for today
Complete Economic Calendar can be found here.
The Euro slipped a bit on uncertainty around global markets based on the return of hospitalizations and infections that merit a slowdown in mobility and activity. Without any major news items or headlines for today, traders will eagerly await Purchasing Managers Index figures on Wednesday. There will be a review in the next few days of the implementation and success thus far of the rescue package that cemented fiscal cooperation around the EU. Any bad assessment could negatively impact the Euro.
Since the end of June, the Mexican Peso had strengthened by 10.0%, but is now weakening again as economic activity remains quite low based on an uneven recovery in worldwide markets. July activity certainly declined big time in comparison to a year ago after a Friday statement from officials. Furthermore, Banxico, the central bank, is expected to keep cutting into interest rates on Thursday. With overall business taking a hit and a world putting out fires, as a commodity-based currency, the Peso may suffer a bit this month after quite a return to gains from March.