05 Oct 2020
On Monday, the USD saw a slight decline from Friday’s close with many awaiting the latest news about the U.S. President Donald Trump’s health. Trump contracted the virus last week, ahead of the upcoming U.S. election.
Trump testing positive for the virus led traders to exchange safer assets and as well as a stock market sell-off. Risk appetite was improved after Trump attended a motorcade outside the hospital where he is being treated. Reports claim that the president may be discharged from the hospital today.
The dollar was being traded at 93.785 this morning, whereas the USD/JPY increased by 0.3% to 105.615.
Strategists said, “FX traders cannot agree on how to interpret the recent news flow. The biggest issue for the FX market is: it is uncertain whether this has made the biggest risk of the U.S, elections – a long political and legal battle about the result – any more or less likely.”
Traders are also awaiting news about a potential coronavirus relief package, which was said to be in discussions.
On the other hand, the British Pound continued to grow weaker at the start of the week. Talks between the UK and the EU are expected to progress after the EU’s executive, Ursula von der Leyen agreed to close “significant gaps” that are hindering a new trade partnership.
The GBP was valued at 1.2939, and at 90.74 against the Euro. Investors are waiting for the release of the August gross domestic product figures, the construction PMI and the industrial production numbers.
In a note to its clients, Goldman Sachs said, “While we have frequently cautioned that the more uncertain global backdrop has made it harder to express views on the Brexit process in the currency this year, we are encouraged by the pound’s increasingly idiosyncratic price action as the negotiation deadlines draw near.”