Greenback Mostly Tight, Pound Dwindles
NOVEMBER 12, 2020
The U.S. Dollar seems to have taken a breather as much as its population after the observance of Veterans Day on Wednesday.
Global markets hit the brakes after vaccine news and optimism as COVID-19 threatens all the progress done in the EU, U.K., and elsewhere. While Asian nations have done better containing the condition, the global momentum is ailing as the condition strikes harder and harder in areas that already had exercised tough measures and lockdowns. Hitting records for infections, hospitalizations, and mortality in one day certainly make the case that we are in the middle of a strong second wave.
On the data front, some things do look positive as Jobless Claims hit a streak of five consecutive weeks lowering and doing better than expected. While the figure is in the 709K level, it is a bit of a welcome break especially after hovering over 1MM so long. Inflationary growth however was non-existent per Consumer Price Index figures for October.
What to Watch Today…
- No major events scheduled for today
The Pound fell by 1.0% as the global recovery looks affected by lockdowns and record problems regarding the pandemic. Most definitely, the U.K. government is bogged down by many issues at one time with an uncertain future in the balance over what an organized, or disorganized Brexit could look like.
Furthermore, the virus has exhausted a lot of the government’s tool and the aid has been significant, but how long can the government keep making up for the economic lag? While Gross Domestic Product figures for the third quarter indicated a return with a 15.8% advance, there is much ground to make up and it will be more difficult with the issues pertaining to trading with the EU under new terms.
The Mexican Peso is retreating some after rejoicing in oil markets earlier in the week as the optimism from vaccine breakthroughs seemed to indicate a better future for energy costs. USD/MXN is a lively pair and likely there will be renewed downward pressure over the neighbor’s tender as OPEC and the International Energy Agency seem to be looking at less demand than previously thought for 2021. A world seeking restrictions to mobility and commerce is a detriment to Peso and all other commodity-based currencies that have experienced big rises in recent days.
Catch the latest movements in FX in our November Currency Outlook…