Forex Today: Fear rules, dollar wins
|Here is what you need to know on Wednesday, October 14:
The American dollar surged on resurgent risk aversion. The usual themes were brought to trading tables, as investors were concerned about the absence of a US coronavirus stimulus package, no progress in Brexit talks, and the continued increase in coronavirus cases which weighs on economic recoveries.
House Speaker Nancy Pelosi said that the proposition from the Trump administration was insufficient on health-care issues. She added that “eventually” a deal will be reached, although it seems it won’t be before the presidential election.
In the Brexit front, EU’s chief negotiator Michel Barnier said that the EU is united, and will continue to work for a “fair deal” with the UK in the coming days and weeks. It worth noting that UK PM Boris Johnson has menaced to abandon talks if a deal can’t be reached this week. GBP/USD plunged to the 1.2920 price zone.
The shared currency approached 1.1700 against the greenback, weighed by the dismal mood and a disappointing German ZEW survey.
The Aussie was among the worst performers, weighed by mounting tensions between Australia and China. Beijing has reportedly banned imports of Australian coal, leaving some Australian vessels stuck at Chinese ports. Tensions between the two economies surged after Australia backed an investigation over the origins of COVID-19.
Wall Street accelerated its decline ahead of the close, on news that Eli Lilly and Company, an American pharmaceutical company headquartered in Indianapolis, announced on Tuesday that it paused the clinical trial of its COVID-19 antibody treatment due to safety concerns. Johnson & Johnson has also announced a pause in its coronavirus vaccine trials amid an unexpected illness in one participant.
Gold capitulated to resurgent dollar’s demand, falling to $1,886 a troy ounce and finishing the day below 1,900.
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