Risk on sentiment persists
Haven currencies underperform amid strong risk sentiment following vaccine and political optimism. US President-elect Biden announced Janet Yellen to be Treasury secretary, a market friendly choice and the first person to have held the three most powerful economic posts.
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November 24, 2020
EUR/USD 1.1853 GBP/USD 1.3310 USD/CAD 1.3078 AUD/USD 0.7328 USD/JPY 104.64 USD/CNH 6.5952 USD/ILS 3.3413 USD/MXN 20.0549 USD/CHF 0.9126 USD/INR 74.00
The dollar continues to trade weaker on month-end rebalancing model and risk-on sentiment in the markets. Near-term political uncertainty is easing and markets are beginning to be optimistic about the upcoming presidential transition. Markets see Yellen as a friendly appointment as she was at the helm during a long economic expansion and low interest rate environment.GBPStrong US data yesterday sent cable lower, but the currency has since recovered and is up near 1% on the dollar over the last week. PM Johnson is expected to release an exit strategy from the current lockdown which is in place through early December.EUR
After a sharp decline yesterday, the euro ticked back up against the greenback on slightly positive economic numbers in the eurozone. Germany released numbers showing the economy grew by 8.5% in Q3 – better than predicted and a rebound from contracting 9.7% in Q2.CAD
After rising versus the greenback amid strong oil prices and equity optimism, the Canadian dollar gave back gains early in the session.ASIA/PACIFIC
US November PMI data showed a strength in US GDP growth relative to Japan, and the yen fell versus the dollar. The yen attempted to crawn back slightly, and has since bounced back above the 104.50 level.
The Chinese yuan advanced to 6.5822 versus he US dollar – a gain of over 8% in the last six months. Chinese exporters are beginning to feel this squeeze of the surging yuan and weak overseas demand due to Covid19.
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