Currency Outlook

December 2020 – IN BRIEF

What Happened

  • Per the Bloomberg Dollar Spot Index, USD had its weakest November ever
  • Record risk-taking after COVID-19 vaccine developments sank the buck by 2.4%
  • The pandemic is not going away yet, and there are lockdowns, yet the U.S. Dollar lost its safe-haven appeal and reached fresh two-year lows
  • Sterling climbed by 3.1% with reportedly new hopes for a post-Brexit deal after key departure
  • Petro-currencies and other commodity-based currencies resurged, benefitting from the MSCI World Index hitting an all-time record high

Tempus’ View

  • Greenback restrengthening possible if a fiscal package miraculously agreed on
  • Although vaccine news has excited markets, fundamentals must improve for any momentum to be sustained
  • Anxiety in Europe over the implementation of rescue funds could revert some Euro gains
  • Brexit could still turn into an uglier mess as London financial community begs for clarity on all and Scotland seeks independence
  • December could bring even more surprises as a unique 2020 comes to a hopeful end

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