Forex Today: Brexit in deep crisis, vaccine hopes resurface, all eyes on the ECB
- 10th September 2020
- Posted by: Hakeem
- Category: FOREX LATEST NEWS DAILY
Here is what you need to know on Thursday, September 10:
Markets are calm after a “turnaround Wednesday” which saw a rebound partially triggered by reports about optimism from the ECB, which is the main event of the day. Brexit talks are in crisis following controversial British legislation and coronavirus vaccine hopes remain robust.
The European Central Bank is set to leave its policy unchanged but take stock of the current economic situation. Reports suggest that the ECB’s new forecast will convey more confidence in the recovery, despite rising COVID-19 cases in the old continent. EUR/USD advanced and settled above 1.18 ahead of the decision. Comments about the exchange rate of the euro – following concerns previously expressed – are also eyed.
Brexit crisis: The EU may press charges against the UK following London’s publication of a draft bill that violates the Withdrawal Agreement – even before it turns into law. The pound dropped on the publication of the legal text but bounced when Brussels announced it would not abandon talks. GBP/USD recovered from under 1.29 to above 1.30 before consolidating its gains.
Emergency meeting: Negotiators from both sides will hold a special meeting in London to discuss the situation. US Speaker of the House Nancy Pelosi said Congress would not approve any US-UK trade deal if Britain breaks the Good Friday peace agreement.
Coronavirus vaccine: Markets recovered from the blow dealt by AstraZeneca’s halting of its COVID-19 vaccine Phase 3 trial. Investors hope it would turn into a temporary delay. Moreover, other efforts are underway. The EU secured 200 million vaccine doses from Pfizer and BioNTech, once their immunization passes all the tests.
President Donald Trump admitted he downplayed the significance of coronavirus, according to his admission before legendary journalist Bob Woodward. He said it will go away despite being warned of its dangers. Rival Joe Biden seized on the news and said Trump misled the public. The challenger is widening his lead against the incumbent.
Elsewhere in Washington, Democrats and Republicans remain far apart on fiscal stimulus talks, with some already speculating no deal will be reached before the elections. Upbeat economic figures are reducing the sense of urgency.
US initial jobless claims are set to extend their decline after hitting 881,000 last week. The world’s largest recovery is extending its gradual recovery.
Oil prices have been recovering from the lows amid the risk-on mood. WTI topped $38 before edging lower. OPEC+ compliance has increased from 96% to 103% according to a report by Energy Intelligence.
The Canadian dollar benefited from the bump up in petrol prices and by a relatively confident message from the Bank of Canada. The BOC left its policy – including asset purchases – unchanged.
Cryptocurrencies are on a recovery path, with Bitcoin bouncing off $10,000.