Commodity-linked currencies rebound while the dollar erases earlier gains

Cate Camerota

November 2, 2020

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

FX Rates
November 2, 2020

Rates are not real time. Rates are today's indicative mid-market rates as of time of publishing, which may vary. Please contact SVB for a current quote.

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
USD
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.
EUR
The 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/PACIFIC
The 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.

For more analysis on FX markets or information regarding SVB's FX services:

Contact your respective SVB FX Advisor or the SVB FX Advisory Team at fxadvisors@svb.com.
See all of SVB's latest FX information and commentary at www.svb.com/trends-insights/foreign-exchange-advisory

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Source: Bloomberg

This article is intended for U.S. audiences only.

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WRITTEN BY

Cate Camerota

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