19 Oct 2020
Asian currencies are on the high at the start of the week, aided by China’s recovery from the COVID-19 pandemic. “The (Chinese) GDP numbers came in slightly below expectations, but the monthly data shows there is no reason to be overly pessimistic,” economists stated.
On Monday, the Chinese yuan was trading at 6.6982. initially, it had hit a fresh 18-month peak of 6.6852. “China’s economy remains on the recovery path, driven by a rebound in exports. Consumer spending is also headed in the right direction, but we cannot say it has completely shaken off the drag caused by the coronavirus.”
Moreover, the Japanese yen traded at 105.40 against the British dollar.
On the other hand, the Australian and New Zealand dollars failed to maintain previous gains. The two currencies increased by 0.1%.
Commonwealth Bank of Australia analyst Kim Mundy said, “The dollar can remain elevated this week. A lack of fiscal stimulus and rising coronavirus infections raise concerns about the global economic outlook.”
The GBP/USD pair is trading at 1.2936, 0.2% higher than Friday’s value.
The U.S. will hold its presidential election in around two weeks. The dollar is expected to be weakened if Democrat Joe Biden wins the election. This is due to Biden’s promises to spend more.
2Markets will be attentive to any potential shift in polls, although traditionally the last debate has less impact in public opinion,” analysts said.