Currency Outlook

OCTOBER 2020 – IN BRIEF

What Happened

  • The Greenback mounted a comeback, prevented a sixth consecutive month of losses
  • CNY and Asian currencies held their own weight, but the buck rose overall by 1.3% according to the Bloomberg Dollar Spot Index
  • Fed Chairman and U.S. Treasury Secretary finished empty-handed on a rescue package
  • The lack of fiscal aid caused market jitters with Dow Jones down 3.1% for the month
  • Euro and other majors erased their August gains with risk-aversion and COVID-19 causing havoc with more infections going into winter

Tempus’ View

  • A smaller-than-expected spending bill may be agreed upon prior to the November vote
  • Election volatility is likely to cause wild movement in markets as COVID-19 causes issues for the political class
  • Sterling fell as we called it, but a renewed mood of reconciliation may help uplift it
  • MSCI Emerging Market Currencies likely to face further depreciation as pandemic charges high toll on smaller economies
  • U.S. Dollar strengthening may be based primarily on fears over the weak recovery

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