Dollar Stunned this Week, Weakest Since 2018

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Dollar Stunned this Week, Weakest Since 2018

NOVEMBER 06, 2020

The U.S. Dollar continues its decline as this week has proven to be one beneficial for global market risk-taking. 

Overview

Indeed, the Bloomberg Dollar Spot Index fell by over 2.0% this week thus reaching its weakest point since 2018. As the results of the Presidential come in, we will see if there is only further acceleration to the buck’s sinking or if the bleeding stops. Things are starting to look a bit mixed with the Pound not climbing as strongly and the safe-haven Yen is relatively quiet.

We got to look at the Employment Situation earlier and things look to be improving at a faster pace than thought. The Unemployment Rate fell to 6.9% from 7.9% the month prior, 638K payrolls were added over the estimated 580K, and Average Hourly Earnings increased by a little bit.

With the sentiment very risk-on and this data providing a better picture than expected, the buck could be stuck in these weakening paths against most currency pairs. Come Monday, we hope there is more clarity about the immediate future and see who is elected and if a push for a rescue package can get started. The Fed’s head Jerome Powell asked again during his conference yesterday.

What to Watch Today…

  • Election Headlines still dominate

View this month’s Economic Calendar

How will the three election outcome scenarios affect USD? Find out here…

Election Insights

EUR  

The Euro is trading around its best levels since the end of August and could see a bit more boost if stocks keep rising. The focus this week was most certainly on the U.1s. but we will need to see how much damage to the European recovery there will be with national lockdowns taking place across the continent. We expect Euro swings to come and some doubt over the currency as November proves to be like March or April in terms of activity..

GBP  

The Pound improved throughout the week and even found some support from the Bank of England as those officials refrained from cutting rates or adding too much into their Quantitative Easing program. We see Sterling as quite volatile, especially next week as we enter new talks to revive the idea of trading with the EU post-Brexit. The challenges are many for the U.K. and there could be pressure on the British government as it is losing popularity to the opposition.

Catch the latest movements in FX in our November Currency Outlook

Monthly Currency Outlook
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