Daily Currency Update
USD - United States DollarIt’s been three days since votes rolled in for the 2020 US Presidential election, and its been three days of decline for the US dollar.While there have been several decisive victories to come out of the election – the US Senate remains in control of the Republicans and the House of Representatives under Democrat control – the executive has not been decided. During this uncertainty, the value of the dollar has declined about 2% against the euro, one percentage point against the pound, nearly 3% against the Australian dollar and 1.5% against the Canadian dollar.Aside from the US presidential election and record setting COVID-19 numbers, the US businesses created 638,000 new jobs in the labor market. Unemployment fell to 6.9%. Employment data is a leading indicator of consumer spending and accounts for a large percentage of economic activity.
Key Movers
The Bank of England took center stage on Thursday as the central bank left its interest rate unchanged at 0.1% but boosted its bond buying program by a larger than expected £150 billion. The market responded positively to the news that the bank would make further rate cuts into negative territory. Chancellor Rishi Sunak added fuel to the rally yesterday after extending the Coronavirus Job Retention Scheme that would provide furloughed employees 80% of their usual salary for hours not worked for the next five months, taking the scheme through the difficult winter period, all the way to March next year. He has also agreed to support the self-employed in a similar manner.Thursday’s session saw the Australian dollar rise to a 6-week high as the greenback fell 0.7% through trade. AUDUSD ascended from 0.7170 to 0.7276 as global equities pushed higher as vote counting continued in the US. The New Zealand dollar also benefited from greenback weakness, with NZDUSD rising from 0.6700 to 0.6769. Despite this, the Australian dollar strength saw AUDNZD rise about 50 points from 1.07 to 1.0750. The Australian dollar will continue to trade on developments out of the US election with overnight moves paving the way to a move above 0.7300 before 0.7345.
Expected Ranges
- EUR/USD: 1.179 - 1.188 ▼
- GBP/USD: 1.308 - 1.317 ▼
- AUD/USD: 0.724 - 0.728 ▲
- USD/CAD: 1.302 - 1.309 ▼