Global market watch - 25th November 2020
The dollar followed Monday’s route of morning strength followed by afternoon weakness on Tuesday but to a lesser degree, as it traded in recent ranges. The US equity markets stayed firm with the Dow hitting 30,000 as President elect Biden started to make nominations for his cabinet and the transfer of power commenced. In European trading the dollar was soft first off and will now take direction from the host of data releases this afternoon, which include preliminary GDP, durable goods and unemployment claims. The FOMC meeting minutes round off the day and the week for the US.
USD/CAD traded quietly as the market waited for the long weekend.
EUR/USD squeezed higher overnight and traded at levels not seen since September before easing off as the market priced in the new US administration elect. ECB’s De Guindos said that Yellen’s appointment is good for the US and world economy.
GBP/USD was bought again by the London market hopeful of hearing news that a UK-EU trade deal would be soon agreed. The press reports that a deal involving trade, security and fishing could be in sight early next week. There is still disagreement over the EU’s demand that the UK agrees to a minimum level of environment standards and workers’ rights. The EU wants a ‘meaningful mechanism’ to align UK and EU regulations. So that UK law changes when EU law changes. This is very much a red line for the UK. EU Commission President Von Der Leyen said that Brexit talks are entering decisive days. Chancellor Sunak speaks at 12:30 pm UK time today to update us on how the economy is performing and how indebted the UK is. He will also outline plans to support the employment market.
The Antipodean currencies both did well against the Greenback in the morning, before easing back later in the day. In early European trading China announced that some Australian coal was below environmental standards.