FXTM information and reviews
FXTM
93%
OctaFX information and reviews
OctaFX
91%
FXCC information and reviews
FXCC
90%
Libertex information and reviews
Libertex
89%
FxPro information and reviews
FxPro
88%
HotForex information and reviews
HotForex
87%

Dollar retreats as stocks roar higher, Trump faces Biden


29 September 2020

Optimism that a stimulus deal can still be reached on this side of the US election has returned to global markets, after the Democrats watered down their demands a little further yesterday, sparking a relief rally in riskier assets. They unveiled a new proposal that would cost $2.2 trillion, far smaller than their opening bid of $3.4 trillion that was fiercely rejected by Republicans.

This is still miles away from the $1.5 trillion the White House signaled it is open to, but a step in the right direction for sure. The two sides are coming closer and investors are betting that it is Trump’s turn to make concessions now, as he cannot afford to miss such a ‘tremendous’ opportunity to score points with the public right before the election.

Stock markets raced higher in relief while the dollar retreated across the board, partly as traders dumped defensive plays and partly due to renewed deficit concerns. The greenback has turned into a mirror reflection of equity markets again this past month, with the inverse correlation between the two returning with a bang.

The ball is in Trump’s court now and the next ‘big’ move in both the dollar and equities may depend on whether he comes back with a stimulus counterproposal, or nothing at all. Admittedly, he is more likely to negotiate, as letting both the economy and his beloved stock market fall off a cliff ahead of a closely contested election is not very strategic.

Sterling claws its way higher, euro steps on dollar


In the broader FX arena, the British pound outperformed on Monday. Besides the risk-on atmosphere, the pound also got a boost from BoE Deputy Governor Ramsden downplaying negative interest rates and hopes that things are about to get serious in the Brexit talks.

The coming weeks could be a bumpy ride, but markets are sensing that the endgame is still an eleventh-hour Brexit deal, even if there is a lot of posturing before we get there. This has been the playbook in this negotiating process so far, which is natural as it is much easier politically speaking to ‘sell’ any deal to the public without looking weak if the alternative is an immediate economic catastrophe.

In euro land, the single currency capitalized on the dollar’s troubles to cruise higher, helped by reports that the ECB is sharply divided between doves and hawks, which makes any future easing package less likely amidst the infighting. Of course, if tomorrow’s inflation data show the bloc remained in deflation, policymakers may not have much of a choice. Before that, Germany’s inflation stats later today will give us an idea of whether the ECB will need bigger guns.

Trump and Biden go head-to-head


Donald Trump will meet Joe Biden for their first debate face-off during the early Asian session Wednesday, at 01:00 GMT. Trump is widely expected to run away with it, as he is a brutally effective debater. But don’t sleep on Joe Biden. The expectations bar has been set so low for him by the Trump campaign attacking him ferociously, that he might surprise everyone if he just delivers a decent performance.

Ultimately though, will the debates move the needle? Probably not. Research suggests debates generally don’t have an electoral impact, and that may be especially true this time as polls show 90% of voters have already made up their minds. Many have also voted by mailed ballots by now.

Still, we may get crucial insights into how different assets may react to the election if there is a clear winner tonight. There’s also a parade of Fed speakers coming up, including Williams (13:15 GMT), Harker (13:30 GMT), and Vice Chairman Clarida (15:40 GMT).

#source

Share:


Related

US Dollar Index adds to recent losses and retests 95.40 ahead of data
US Dollar Index adds to recent losses and retests 95.40 ahead of data

DXY extends the decline to the 95.40 region on Thursday. US yields correct further lower from recent tops. Initial Claims, the Philly Fed Index are next in the US docket...

21 Jan 2022

EURUSD decided to wait
EURUSD decided to wait

EURUSD stopped growing; the statistics failed the "greenback". The major currency pair is rather neutral early in the week. The current quote for the instrument is 1.1426...

17 Jan 2022

The Euro skyrocketed to its 8-week highs
The Euro skyrocketed to its 8-week highs

EURUSD continued rising after the US reported on inflation. The major currency pair continues growing on Thursday. The current quote for the instrument is 1.1468...

14 Jan 2022

US Dollar Index appears supported near 95.50
US Dollar Index appears supported near 95.50

DXY looks depressed around the mid-95.00s midweek. US 10y yields remain capped by the 1.80% area. Inflation figures tracked by the CPI next of note in the docket...

12 Jan 2022

EUR/USD Keep Falling
EUR/USD Keep Falling

The major currency pair is falling after demonstrating some growth last week. The asset is mostly trading at 1.1330. Market players are still processing the FOMC Meeting...

11 Jan 2022

Hot inflation in eurozone could rescue the euro from strong NFP
Hot inflation in eurozone could rescue the euro from strong NFP

EUR/USD seems to have steadied around 1.1300 ahead of key data releases. According to FXStreet’s Eren Sengezer, the shared currency could find demand on a hot inflation report...

7 Jan 2022


XM information and reviews
XM
86%
FXCM information and reviews
FXCM
85%
AvaTrade information and reviews
AvaTrade
84%
LegacyFX information and reviews
LegacyFX
83%
FP Markets information and reviews
FP Markets
82%
Pepperstone information and reviews
Pepperstone
82%

© 2006-2022 Forex-Ratings.com

The usage of this website constitutes acceptance of the following legal information.
Any contracts of financial instruments offered to conclude bear high risks and may result in the full loss of the deposited funds. Prior to making transactions one should get acquainted with the risks to which they relate. All the information featured on the website (reviews, brokers' news, comments, analysis, quotes, forecasts or other information materials provided by Forex Ratings, as well as information provided by the partners), including graphical information about the forex companies, brokers and dealing desks, is intended solely for informational purposes, is not a means of advertising them, and doesn't imply direct instructions for investing. Forex Ratings shall not be liable for any loss, including unlimited loss of funds, which may arise directly or indirectly from the usage of this information. The editorial staff of the website does not bear any responsibility whatsoever for the content of the comments or reviews made by the site users about the forex companies. The entire responsibility for the contents rests with the commentators. Reprint of the materials is available only with the permission of the editorial staff.
We use cookies to improve your experience and to make your stay with us more comfortable. By using Forex-Ratings.com website you agree to the cookies policy.