A mixed collection of earnings numbers and a drop in commodity prices have spurred a pause to the global equity rally and renewed dollar interest versus commodity peers. House Speaker Pelosi is facing renewed pressure to get President Biden’s economic plan backed by lawmakers in the coming days. The pound, loonie and offshore yuan sold off as the euro and yen gained ground.
"For anyone who lives in the oak-and-maple area of New England, there is a perennial temptation to plunge into a purple sea of adjectives about October."
October 27, 2021
EUR/USD 1.1621 GBP/USD 1.3738 USD/CAD 1.2423 AUD/USD 0.7513 USD/JPY 113.6 USD/CNH 6.3891 USD/ILS 3.1897 USD/MXN 20.1654 USD/CHF 0.9172 USD/INR 75.0262 USD/BRL 5.5589 USD/SGD 1.3482 USD/DKK 6.4017 USD/SEK 8.5862 USD/NOK 8.3879
Dollar holds above the 55-DMA and is mixed versus peers as markets move to risk-off. The dollar is experiencing pressure from a fourth day of declines in Treasury yields as the 10-year slips below 1.60%. Durable goods orders fell 0.4% in September, beating expectations of a 1.1% decline.GBP
The pound sold off slightly before the UK budget statement this morning most likely pressured by dollar buying. Chancellor Rishi Sunak upgraded the economic growth forecast from 4% to 6.5% in 2021 and indicated the economy will return to pre-covid levels by the end of the year. The BoE meets next Thursday.EUR
Following two days of declines, the euro is slightly stronger amid month-end rebalancing flows and 1.1600 options rolling off this week. Germany cut 2021 growth forecast putting pressure on eurozone equities.CAD
USD/CAD levels continued to increase through the night through 1.24. BoC is scheduled to announce it monetary policy decision today. Expectation is for a potential rate hike in April 2022. Investors have begun to price this rate hike into money markets.ASIA/PACIFIC
The offshore yuan fell on dollar buying interest from state banks. US-China tensions remain top of mind as increased focus on military weapon development causes concern for US officials.
USD/JPY drops below 1.14 ahead of central bank meetings for the BoJ this week and Fed next week.
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