Currency Outlook

SEPTEMBER 2020 – IN BRIEF

What Happened

  • August represented a fifth straight month of declines for the U.S. Dollar, falling 1.8%
  • All across the board, buck weakness has reached the lowest point in over two years
  • A more resolute Fed will prioritize full employment, let inflation run freer, loosen policy
  • Euro gains continued as it improved by another 1.5% despite the return of COVID-19 cases in Italy, France, and Spain
  • Appetite for risk and optimism over a stronger global recovery benefited petro-currencies NOK, CAD, and MXN by 2.5% and above

 

Tempus’ View

  • U.S. Dollar fortunes will continue to be tied to risk and less aversion could keep it weak
  • Volatility is due to increase as we enter a crucial period of economic data and elections
  • British Pound could be knocked off its high pedestal as Brexit worries grow nearing the deadline for an actual plan for trade
  • Oil and commodity prices on the rise could sustain momentum for CAD and MXN
  • The Euro and other currencies may experience plenty of swings as we witness more central bank meetings and end of Q3

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