Kiwi uptick stalls as PBoC looks to arrest the CNY upturn

Key Movers

The Great British Pound continued its push beyond 1.30, buoyed by the implementations of COVID 19 restrictions that have been perceived to be lighter than first anticipated. AS the UK battels to control a 2nd wave of infections Boris Johnson announced new social distancing restrictions where-in the fight against coronavirus will now be regionalised. A targeted approach is seen as preferable toa full scale national lockdown amid hopes the engine driving the economy can keep running. Sterling touched intraday highs at 1.3080 as attentions now turn to UK-EU trade talks. European leaders will be attending EU summit talks with clear goal of reaching at least some form of trade agreement. The self-imposed deadline for a Brexit trade package has arrived and failure to put aside key differences this week could prompt a rapid and sharp GBP correction. The US dollar traded nearer the three week low when measured against a basket of currencies, unable to recoup Friday’s correction as hopes a Stimulus package designed to ease the burden of the COVID19 pandemic were bolstered. Friday’s depreciation marked the biggest daily decline in almost 6 weeks as demand for risk improved amid expectations the lawmakers will pass at least basic COVID19 relief measures while the Presidential election is unlikely to be close enough for Trump and the republicans to contest. Concerns the White House would enter a long and protracted protest through the supreme courts system should the election result in a narrow Biden win have eased as polls show Biden has widened his advantage on the incumbent. That said Trump is still polling well in key battleground states and the race is far from over. Attentions today remain with the risk narrative and further development surrounding US fiscal stimulus.