The U.S. dollar held similar ranges to Friday’s close overnight. The greenback was under wide pressure last week and declined for four consecutive days. Overall, the U.S. dollar is at its weakest level in three months.
After a slew of Fed speakers last week, we have entered the blackout period before the central bank’s decision on October 30th. There is also no major economic data on today’s docket so any movements will likely continue to be dictated from events abroad, of which there are plenty.
It is also election day in Canada. Current Prime Minister Justin Trudeau is running neck-and-neck with the Conservative leader Andrew Scheer. Expect results to start to trickle in late tonight but we should have a clearer picture by tomorrow morning.
What to Watch Today…
- No major events scheduled for today.
Complete Economic Calendar can be found here.
The Euro continues to hold near a two-month high versus its American rival. The diminished likelihood of a no-deal Brexit has benefited the sterling but also the Euro as a hard Brexit would have had devastating ramifications for the continent. The common currency has also found support as analysts believe the European Central Bank will refrain from adding more stimulus in the near-term. Meanwhile, the Fed is widely expected to cut interest rates next week, somewhat closing the interest rate differential between the two. The ECB will meet on Thursday, which will be the final meeting for outgoing ECB chief Mario Draghi.
The sterling remains resilient near a five-month high despite the failure of Prime Minister Boris Johnson to get a “yes” vote on his Brexit plan Saturday. In a rare Saturday session, MPs voted by a slim margin to force Johnson to request an extension from the EU. There is still a small chance that Speaker Bercow could allow a vote on Johnson’s deal today, but we see this as unlikely. However, there is optimism that the Prime Minister could secure a victory as early as this week. Nevertheless, the chances of a hard, no-deal Brexit have slimmed to close to zero, boosting the sterling.