Daily Market Update

Dollar Gains as Stocks Dump Value

November 20, 2018

The U.S. dollar continued its negative momentum for most of the night.

Overview

But the greenback’s luck changed around 4 a.m. Eastern and now the dollar is modestly stronger against most of its counterparts. A rout in global equity markets looks to have spurred demand for the safe-haven greenback. U.S. equities fell yesterday with the NASDAQ plummeting over 3.0%. Futures show that the bloodbath is likely to continue when markets open this morning. European and Asian indexes were all down 1-2%.

The safe-haven Japanese yen was winner overnight, rising to a near a three-week best.

This morning’s economic data showed that housing starts rebounded from a disappointing September, but still failed to meet economists’ estimates. New home construction increased 1.5% in October. Permits, an indication of future construction, fell 0.6%, better than the estimated 0.8% decrease. There is no other fundamental data or Fed speakers on today’s docket.

 

What to Watch Today…

  • No major events scheduled for today.

The complete economic calendar can be found here.

 

EUR

The Euro popped higher against the U.S. dollar yesterday and overnight, but has given back much of those gains at the time of writing. There is no major economic data on today’s docket but the EUR/USD is testing technical levels after pulling up from a 17-month low last week. Eurozone Finance Ministers are currently meeting in Brussels so any headlines from that meeting could move the common currency. But we expect EUR/USD to try to establish, new higher ranges today.

GBP

Heightened volatility in the GBP/USD pair is likely here to stay. The currency pair continues to whiplash with the prevailing Brexit headlines. Bank of England head Mark Carney appeared before the Treasury Select Committee this morning and reiterated that Brexit risks are “uncomfortably high.” Carney also maintained that the uncertainty around Brexit has led companies to scale back or withhold investment in their businesses. We will be closely watching Brexit developments as Prime Minister Theresa May looks to secure support for her Brexit plan.

 

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