Daily Market Update

Dollar erases some losses, gains on confidence

November 24, 2020

The U.S. Dollar is trading stronger than yesterday’s start to the North American session as optimism remains, but with caution and surprisingly better figures for October in the U.S. than on the other side of the Atlantic. 

Overview

We got a chance to compare Purchasing Managers Indices and while we saw expansion in the composite measure, the Europeans are seeing their services industry take a major hit, while the overall picture looks like a much slower recovery and momentum than anticipated.

The government made a move to ascertain the results of the presidential election and Joe Biden and the team are now starting their federal transition. Markets and holders of the buck are enjoying a break from uncertainty. We will be seeing a familiar face starting in the upcoming administration as Janet Yellen, former Fed chairwoman has been pinned as Treasury Secretary.

We will get Initial Jobless Claims tomorrow and the Fed Minutes, which will have some influence on the buck. Also, We will keep an eye on market sentiment and are surprised at the faith and value going into bitcoin once again. In addressing questions about it yesterday, we addressed the concern over something that has been adopted and adapted enigmatically, as its nature dictates.

Governments joining the digital currency age is one thing, but we have our doubts about its sustainability at such prices that seem unattainable and misunderstood. As COVID-19  makes us rethink a lot, one thing that might become more important is transparency and crypto does not offer that.

 

What to Watch Today…

  • No major events scheduled for today

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EUR 

The Euro went down a bit as doubts over the implementation of the large €750BN rescue package, which has been delayed by issues over governance between Brussels and countries that have changed their power structures such as Poland and Hungary.

This is where populism is crashing with the continental pact, as sovereignty is given to nations, but now with money involved, there is a need to have more say on how things are run.

We will hear from Christine Lagarde about it later today in a planned address, but Finnish EU financial policymaker Olli Rehn criticized the current standoff as irresponsible.

 

GBP 

The Pound was the only counterpart to the buck actually seeing upward movement and this exception could continue or come to an end depending on confirmation of news we may get in a matter of just hours or days.

EU Commission President Ursula von der Leyen is said to be planning a key conversation with Prime Minister Boris Johnson over the phone to coordinate after reports that there will be a temporary deal agreed on with delay for further negotiation on certain items into next year.

As Brexit keeps ignoring deadlines, we see a focus on the U.K. economy fomenting doubt over Sterling, but swings are likely as any piece of good news on Brexit may keep cutting the currency breaks.

 

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