Tuesday, October 20, 2020

Market Players Are Beware - Election Factors Still Affect US Dollars!

 The US dollar showed a downtrend on Monday with investors betting that a deal in Washington on fiscal stimulus packages could be reached ahead of the next U.S. election. Apart from that, another factor to be considered is the hope for a Covid-19 pandemic vaccine at the end of the year.

The dollar index traded down 0.45% against a basket of major currencies at 93,300.

President Donald Trump said he was ready for a bigger stimulus than proposed by House of Representatives Speaker Nancy Pelosi worth $ 2.2 trillion. However, the market remains cautious as Trump needs to convince Senate Republicans who prefer small aid packages, to support his proposal.

Pelos stated that although there were differences with Trump on the Covid-19 aid package, he expressed the belief that the law could continue before Election Day.

In addition, the manufacturer of the Pfizer Inc Vaccine reported on Friday that the preparation of the Covid-19 vaccine for the U.S. will be released later this year.

On the other hand, Asian currencies and other commodities continued to strengthen as driven by China's economic growth better than the forecast and the outbreak of the Covid-19 outbreak was still under control.

The AUD currency strengthened by 0.23% against the US dollar. While the NZD currency strengthened 0.48% against the US dollar as of 10.45 p.m.

Meanwhile, the pound sterling showed higher gains following the Brexit trade deal negotiations expected to continue this week despite negative statements from UK Prime Minister Boris Johnson.