Monday, October 19, 2020

What To Consider Before Starting Trade Earlier This Week?

 The start of trading earlier in the week showed the US dollar continued to maintain its strength after closing higher against most major currencies on Friday.

The greenback dollar traded steady during the Asian session, following a 0.7% rise last week supported by concerns over a surge in coronavirus cases and a stalemate in US fiscal stimulus package negotiations.

With just a few weeks to go before the US presidential election, Speaker of the House of Representatives Nancy Pelosi tries to raise market expectations by saying she is still confident the deal can be reached before the election.

However, with the gap between the two parties still far away, it is seen as difficult to achieve.

In addition, encouraging data release also supported US dollar trading to close higher, with retail sales showing a significant increase of 1.9% last month, more than double market expectations.

The strengthening of the US dollar has affected the euro trade which has also been affected by the surge in coronavirus cases in Europe resulting in new sanctions being imposed.

Over the weekend, European Central Bank (ECB) member Fabio Panetta warned that greater monetary policy easing was much needed following the second wave of Covid-19 which affected the economic recovery.

Meanwhile, the latest hopes in the Brexit trade deal negotiations are back in support of pound trading to rise at the opening of the week. European Commission President Ursula von der Leyen said EU negotiators would resume talks with the UK this week.