The U.S. Dollar is down in a big way as good news on the potential for a vaccine is boosting market sentiment once again lifting all other assets.
Overview
Safe-haven Japanese Yen and Gold are down headed towards losses of over half a percent and more from their flows this morning. The companies Moderna, Inc. and AstraZeneca announced major progress that could lead to solutions to the virus’ contagion in the Fall. Experts such as Dr. Anthony Fauci have already commented that this development would put us on the right track to overcome this situation. Meanwhile, mixed earnings reports and hopes for fighting COVID-19 are aiding stock markets, thus potential for buck sinking as the week progresses.
Today’s news on China/U.S. relations tells us that the U.S. officially is reducing the privileges to Hong Kong as a place with special status. The changes to the city-state will continue and it could lead to disturbances in trading with Asia. For the remainder of the day, one main item to watch for is declarations from the OPEC+ meeting that could lead to an extension or reduction of production cuts. Anything will certainly affect CAD and MXN, which at the time of writing have appreciated by 0.4% and 1.7% respectively.
What to Watch Today…
- No major events scheduled today
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EUR
The Euro is now trading at its strongest level since March 10th. German leader Angela Merkel and others are looking forward to a summit in Brussels that could signify the unanimous passing of a rescue package that includes hundreds of billions in lending as well as grants for recovery.
The positive sentiment is helping boost the shared currency to its best levels in months and our forecast for stronger Euro is materializing as a result. Any chances for a downfall lie on the competence that EU leaders can muster over the weekend. If the aid is not agreed upon and signed on, expect issues and troubles.
GBP
The Pound is defiant after having originally weakened yesterday and has now recovered and picked up more steam. Vaccine headlines are of help, but additionally, Sterling is propelled by activity in London as smaller economies are now back trading with normalcy such as Norway and Australia. We could see GBP get more reason to surge as a fiscal stimulus announced last week gets worked on.
