Monday, October 26, 2020

What Investors Need To Know Before Trading At The Beginning Of The Week?

 The US dollar gained support at the start of trading earlier in the week by trading higher against most major currencies as the continued rise in Covid-19 cases in Europe and the United States as well as a lack of progress on stimulus packages kept investors cautious.

The United States has recorded the highest number of Covid-19 cases for two consecutive days, while Italy has tightened restrictions by ordering restaurants and bars to close at 6 p.m.

U.S. House of Representatives Speaker Nancy Pelosi said Sunday that she expects a response from the White House on Monday on the latest stimulus spending plan.

The euro showed a decline in the Asian session after closing near its one-month high on Friday, supported by favorable manufacturing data while the services sector continued to weaken in October.

Among the highlights this week was the European Central Bank (ECB) policy meeting which was widely expected to loosen monetary policy before the end of the year following the impact of the second wave on the European economy.

Meanwhile, no changes in monetary policy are expected from the Bank of Japan (BOJ) and the Bank of Canada (BOC), but the BOJ is likely to lower its economic valuation.

The pound sterling also depreciated after being pressed by manufacturing and services PMI data showing slower growth, while uncertainty over Brexit negotiations also affected the currency's decline.

On the other hand, the Aussie dollar and the kiwi dollar also showed a decline against the USD in the Asian session, but remained strong after closing higher on Friday's trading session.