Commodity-linked currencies rebound while the dollar erases earlier gains
Earlier in the trading session, oil prices hit a five-month low weakening as lockdowns in Europe tightened and concerns for the global economy increased.
Rebounding commodities and higher European equities pushed commodity-linked currencies higher while paring earlier gains for the USD.
Economic Calendar for this week:
Tuesday: US Presidential Election
Wednesday: US ADP Employment Change
Thursday: UK Bank of England Bank Rate, US FOMC Rate Decision
Friday: US Change in Nonfarm Payrolls, US Unemployment Rate
November 2, 2020
EUR/USD 1.1634 GBP/USD 1.2926 USD/CAD 1.3272 AUD/USD 0.7047 USD/JPY 104.6800 USD/CNH 6.6896 USD/ILS 3.4100 USD/MXN 21.2794 USD/CHF 0.9192 USD/INR 74.4313
Over the weekend, US virus cases eased after two consecutive days of national records heading into Tuesday’s election. The Bloomberg dollar index strengthened as investors moved to risk-off trading ahead of the election and as lockdowns in European countries caused concern for the global economy. Risk sentiment reversed later in the session supported by higher European equities and resulting in the USD erasing earlier gains.GBP
Sterling led losses for G-10 currencies earlier in the trading session hitting a low of 1.2855 but has since moved back above the 1.29 handle. The currency hit a four-week low following an announcement from Prime Minster Boris Johnson of a partial lockdown for the nation over the weekend.EURThe common currency is trading within a tight range of 1.1623-1.1656. The 1.16 handle is seen as a key level of support and the currency could target 1.1486 (Fibonacci retracement of gains since March).CAD
The loonie is the strongest performing G-10 currency this morning alongside the Australian and New Zealand dollar. The Canadian dollar traded higher as investor sentiment recovered from last week and the US heads into the Presidential election. USD/CAD fell 0.5% and hit a session low of 1.3258.ASIA/PACIFICThe Australian dollar broke below 70 cents per US dollar for the first time since July. The currency has since pared losses and is trading back near 0.7050.
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