US dollar softness evaporates
USD/CAD:
There was a momentary effort to sell the US dollar early in New York trade but it's quickly lost steam and reversed.
The FX market is in a bit of a holding pattern more broadly as we watch poll and virus numbers. The big news in Europe was China dropping the counter-cyclical portion of its yuan management mandate. As Anthony Barton explains, this will allow for larger moves in the currency.
The PBoC's function for the USDCNY mid-point fix was "closing price + movements of a basket of currencies + counter-cyclical factor." Removal of the factor pushes the rate towards a market based mechanism (which the PBoC wants).
Yuan weakness isn't what the market wants to see right now but it's not getting enough attention.
