Forexlive Asia FX news wrap: USD is the strongest of the majors

Author: Greg Michalowski | Category: News

Forex news for Asia trading for Thursday, 22 October 2020

The USD advanced to start the new trading day and is ending as the strongest of the major currencies (see ranking below). The catalyst was increased uncertainty about a coronavirus deal being passed, although there is still hope. There is also some concern about Russian and Iranian interference in the US election which helped to weaken equities.

Fed's Bullard spoke positively about the economy and prospects for coronavirus by say 

  • fiscal policy could wait to the 1st quarter 2021, 
  • he sees rapid third-quarter growth continuing into the 4th quarter and 1st half 2021
  • he said the US has made substantial progress in getting virus under control
  • that daily fatalities per million at fallen to levels similar to accidental injuries (hmmmm) 
  • the end of the tunnel for the pandemic could lead to a boom
Bullard is a non-voting member on the Fed board and has been more of a hawk/cheerleader for a V-shaped recovery. The Fed blackout period will begin at the end of business on Friday, October 24 in anticipation of the November 5 FOMC rate decision. Bullard is certainly a Fed official who likes to speak a lot and is also prone to take extreme position one way the other.

Forex news for Asia trading for Thursday, 22 October 2020_

The US stocks ended yesterday's trading day on a down note with the major indices closing near session lows after giving up earlier gains. 

The soft bias in stocks extended into the Asian session where the major indices traded lower.  US stock futures were also lower although with the E-mini down -24.75 points.

The weakness in equities led to the safe haven flows into the relative safety of the US dollar and to a lesser extent, the JPY. The weakest currency was the AUD.   The economic calendar was supposed to include NAB's quarterly business survey results for the 3rd quarter, but they were never released (in the 2nd quarter the index was down -15).  It was a type of day.

The fall in stocks, and the rise in the USD, helped to push precious metal lower. The price of spot gold is trading down minus $10.59 or -0.55% to $1913.74. The low price reached $1910.85.  Spot silver is also lower by minus $0.26 or -1.07% to $24.78.  WTI crude oil futures are trading down -$0.30 or -0.75% to $39.73.

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