Euro Hit a Record High on Tuesday. What about U.S. dollar?

 The euro skyrocketed to a one-week high on Tuesday after plummeting down recently. Global stocks also ended in the red earlier, but they rebounded due to investors’ consolidation mode before No. 3. U.S. presidential election.


The euro EUR=EBS surged forward by 0.3%, hitting a one-week high at $1.18065 after lowering by 0.1% to $1.17600 in early London trading. That also reflected a broader rebound in European stock markets, which jumped into positive territory after registering some early losses. Meanwhile, U.S. stock futures ESc1 rose by 0.6%.


Thus far, markets remained within well-worn recent ranges as lessening hopes for a U.S. Covid-19 aid package combined with surging infections in Europe kept the traders’ mood cautious.


Lee Hardman, the currency strategist at MUFG in London, stated that currency markets are in wait-and-watch mode with investors unwilling to take big bets before such a major event risk.


Markets seem confident that a win by Democrat Joe Biden would lead to more fiscal stimulus, thus potentially weakening the greenback. However, investors are wary of a contested election result that might bolster the safe-haven appeal of the U.S. currency.


Charalambos Pissouros, the senior market analyst at JFD Group, noted that as the U.S. elections approach and with coronavirus infections rising at a fast pace around the world, traders may refrain from engaging in large trading positions.


France already reported a massive jump in people hospitalized, while Ireland issued some of Europe’s toughest restrictions.



What about other currencies?


The Australian dollar plummeted down by 0.4% to $0.7045 AUD=D4. The Aussie hit a three-week low of $0.7032 due to increasing expectations of monetary easing next month by the central bank.


After the Reserve Bank of Australia’s (RBA) last policy meeting, it was confirmed that the Board had discussed cutting rates and buying longer-dated debt to support the economy and restrain the currency.


In Europe, British Pound held on to small gains. The Sterling soared the previous day to $1.2941 GBP=D4. According to Britain’s chief Brexit negotiator David Frost, there is no basis to resume trade talks with the European Union unless there is a fundamental change in Brussels’ approach. So far, they remain at a stalemate.


Meanwhile, the dollar index =USD tumbled down by 0.2% to 93.227. The U.S. currency is on track for a second consecutive day of falls. However, it rallied recently due to safe-haven status. U.S. market was turbulent, while investors contemplated hindering stimulus package and strengthening pandemic.

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