FOREX-Dollar ends losing week lower on election and COVID aid concerns

Reuters

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    By John McCrank
    NEW YORK, Oct 23 (Reuters) - The dollar weakened slightly
against a basket of major currencies on Friday amid uncertainty
over a new round of stimulus ahead of the upcoming U.S.
elections, with the greenback set to record a weekly decline of
around 1%.
    U.S. House of Representatives Speaker Nancy Pelosi said
another round of COVID-19 aid was still was possible before the
Nov. 3 elections, but that President Donald Trump would have to
get reluctant Republicans on board if he wants a deal.
 urn:newsml:reuters.com:*:nL1N2HE0ZN
    Trump and Treasury Secretary Steven Mnuchin countered that
Pelosi must compromise to get an aid package, saying significant
differences remained between the Republican administration and
Democrats.
    The market, pricing in a Biden victory, still expects a
stimulus package by the end of the year, said Joe Manimbo,
senior market analyst at Western Union Business Solutions. 
    "So risk appetite has held the upper hand this week on hopes
for a bold stimulus and that has kept the dollar on its back
foot," he said.
    The dollar index  =USD  was last down 0.23%, or 1% for the
week. 
    Trump and Democratic challenger Joe Biden squared off on
Friday in a less raucous debate than their previous meeting, but
tensions were high, with a focus on the handling of the COVID-19
pandemic and plenty of personal attacks thrown into the mix.
 urn:newsml:reuters.com:*:nL1N2HD0U2
    The dollar is likely to be stuck in a holding pattern in the
near term, given the risk that the election could be contested,
and as the market waits for clarity on the fiscal aid package, 
said Boris Schlossberg, managing director of FX strategy at BK
Asset Management.   
    In Europe, business surveys in France and Germany showed the
impact of the second wave of COVID-19 infections in the euro
zone's two biggest economies, threatening to derail the bloc's
nascent recovery.  urn:newsml:reuters.com:*:nL8N2HE21R
    Despite the data, the euro  EUR=  edged higher 0.34% against
the greenback to $1.1859.
    "The bet here seems to be that growth returns with a
vengeance in 2021, so you get these risk-on flows and that's why
the dollar remains relatively weak, and that's why the euro,
despite all the problems in Europe, the millions of COVID cases
in Spain and in France, refuses to really collapse," said
Schlossberg.        
    The euro also firmed after Reuters reported that France was
laying the groundwork for a fisheries compromise to help the
European Union strike a Brexit deal with Britain.  urn:newsml:reuters.com:*:nL8N2HC5HN
 urn:newsml:reuters.com:*:nL1N2HE0KV
    Sterling initially rose on the report, before giving back
its gains, highlighting the headline risk to the currency around
 Brexit developments. The pound was last down 0.37% at 1.3033
against the dollar.   
    Elsewhere, the safe-haven yen  JPY=D3  dipped 0.12% to
104.725 per dollar, while the Chinese yuan  CNY=  ticked up
0.03% against the dollar after comments from a Chinese official
suggested authorities are not too worried about its recent rise.
 urn:newsml:reuters.com:*:nL4N2HE0W2
    In the week ahead, U.S. third-quarter gross domestic product
data is due on Thursday. 
    "The report is likely to show the steepest quarterly
expansion ever as the economy reopened following lockdowns which
severely restricted activity in Q2," National Bank of Canada
said in a note.
    Monetary policy decisions in Japan and the Eurozone will
also be in focus.
   
========================================================
    Currency bid prices at 2:58PM (1858 GMT)
 Descriptio  RIC         Last         U.S. Close  Pct     YTD Pct     High Bid    Low Bid
 n                                     Previous   Change   Change                 
                                       Session                                    
 Euro/Dolla   EUR=EBS    $1.1859      $1.1819     +0.34%  +5.78%      +1.1862     +1.1787
 r                                                                                
 Dollar/Yen   JPY=D3     104.7250     104.9250    -0.12%  -3.51%      +104.9300   +104.5800
 Euro/Yen     EURJPY=    124.19       123.93      +0.21%  +1.84%      +124.2200   +123.4200
 Dollar/Swi   CHF=EBS    0.9046       0.9072      -0.28%  -6.52%      +0.9092     +0.9035
 ss                                                                               
 Sterling/D   GBP=D3     1.3033       1.3083      -0.37%  -1.73%      +1.3121     +1.3017
 ollar                                                                            
 Dollar/Can   CAD=D3     1.3142       1.3139      +0.03%  +1.17%      +1.3159     +1.3110
 adian                                                                            
 Aussie/Dol   AUD=D3     0.7134       0.7118      +0.24%  +1.68%      +0.7158     +0.7102
 lar                                                                              
 Euro/Swiss   EURCHF=    1.0727       1.0720      +0.07%  -1.15%      +1.0729     +1.0703
 Euro/Sterl   EURGBP=    0.9098       0.9027      +0.79%  +7.62%      +0.9108     +0.9022
 ing                                                                              
 NZ           NZD=D3     0.6683       0.6675      +0.16%  -0.64%      +0.6704     +0.6657
 Dollar/Dol                                                                       
 lar                                                                              
 Dollar/Nor   NOK=D3     9.2320       9.2585      -0.26%  +5.27%      +9.2935     +9.2045
 way                                                                              
 Euro/Norwa   EURNOK=    10.9511      10.9329     +0.17%  +11.32%     +10.9875    +10.9042
 y                                                                                
 Dollar/Swe   SEK=       8.7501       8.7509      +0.12%  -6.39%      +8.7933     +8.7345
 den                                                                              
 Euro/Swede   EURSEK=    10.3771      10.3651     +0.12%  -0.88%      +10.3915    +10.3519
 n                                                                                
 
 (Reporting by John McCrank; editing by Jonathan Oatis)
 ((john.mccrank@thomsonreuters.com Twitter @jmccrank; 1 646
223-6643; Reuters Messaging:
john.mccrank.thomsonreuters.com@reuters.net))

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