Forex news for North American trading on October 20, 2020:
- Pelosi: I'm optimistic. There have been changes over the weekend
- McConnell: We would put a House-supported stimulus deal to a vote "at some point"
- McConnell warns White House against making stimulus deal - report
- US housing starts for September 1.415M vs 1.457M estimate
- Fed's Evans: Economic recovery is 'very uneven'
- UK coronavirus cases rise to 21,331 vs. 18,804 previously.
- Global dairy trade price index rises 0.4%
- Russian oil minister Novak: Too early to to speak about the future of OPEC+ a deal beyond December 2020
Markets:
- Gold up $6 to $1910
- WTI crude up 63-cents to $41.46
- US 10-year yields up 2.2 bps to 0.79%
- S&P 500 up 16 points to 3443
- EUR leads, NZD lags
The market came into the day feeling good about a stimulus deal and felt even better after Pelosi cited progress but continued skepticism about the Senate and timeline weighed late and risk trades gave back gains.
On net, the US dollar was sold in North American trade and the loonie was a winner as oil rose to the best levels in six weeks and natural gas continued its run. USD/CAD fell to 1.3105 from 1.3200 before bids at the figure and the chance in market tone led to a 20-pip bounce.
Cable didn't do much but tried either side of the 1.2920-1.2970 range twice before settling back in the middle. The political drama was more about lockdowns than Brexit. At this point anything is a welcome relief from Brexit.
USD/JPY was sold late in the day as part of a broad USD slump, even with risk trades improving (at the time) and Treasury yields bumping against the range top. The pair finished flat on the day after a failed test of 105.75.
The euro did a better job of holding onto its gains. It chopped around 1.1825 on some slight slowing in the pace of COVID cases.
