Dollar Slightly Weaker as Stocks Look to Rebound
The U.S. dollar is slightly weaker this morning after gaining much of yesterday. The safe-haven gained during yesterday’s session as coronavirus cases spiked and the chances of a stimulus deal dwindled.
Equities had their worst day in a month but look to rebound slightly today despite any respite on the Covid or stimulus front. In fact, cases continue to rise among older people and both houses of Congress have left Washington without a deal.
The U.S. election is one week away, and traders are bracing for heightened volatility across all asset classes, especially if the outcome is not quickly apparent. Knee-jerk price movements may be a common occurrence next week. For the time being, traders appear to be comfortable allowing the greenback to settle into ranges as market participants position themselves ahead of the election.
Therefore, we do not expect data to cause any major swings. Durable goods for September is due out this morning and could test our theory. Consumer confidence and the Richmond Fed are due out at 10 a.m. Also, the first look at third-quarter GDP will be released on Thursday. The growth print is likely to be massive as the economy partially bounced back from a historically bad second quarter amid coronavirus lockdowns.