Buck eases off gas, Global risk-on

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Buck eases off gas, Global risk-on

NOVEMBER 03, 2020

The U.S. Dollar is trading in weaker ranges this morning as the U.S. Election Day takes over the airwaves with sentiment towards risk-appetite. 

Overview

Reports yesterday pointing out that in general there is a risk bias when a U.S. Presidential election occurs, and investors are feeling it. Although COVID-19 remains the most important risk item in our lives as well as the markets, the focus today will be primarily on how quickly we can get a result that indicates clarity about the body of government to count on for next year.

Data-wise, we will get a glimpse of September Factory Orders as well as Durable Goods Orders at 10AM. Tempus will be closely monitoring for any wild movements today as well as tomorrow with some additional hours.

What to Watch Today…

  • U.S. Presidential election all day

View this month’s Economic Calendar

Catch the latest movements in FX in our November Currency Outlook

Monthly Currency Outlook

CAD  

The Canadian Dollar surged along with MXN and other petro-currencies as the risk-on markets provided relief about a world that can continue on a path to find normalcy. Furthermore, oil production cuts that were to be eased off are now going to be delayed, essentially reducing barrels, and hiking up the price per.

This happens to represent a very quick turnaround from what we had going on during yesterday mornings session when oil hits its weakest level in five months. The mood turns from good to doom quickly in today’s markets.

AUD  

The Australian Dollar defied theory and surged by almost 1.5% despite the overnight decision by the Reserve Bank of Australia to reduce interest rates to just above 0.0% (0.1%) from 0.25% and extended its commitment to bond-buying to relieve the pain financially from a global recovery in slowdown.

Regardless of the loose monetary policy decision, Aussie and other globally-connected tender will enjoy any indication that the world is headed in a direction of productivity and less of locking down. Something we talk about in our November Currency Outlook

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