IFX Market Report: Friday 9th October 2020

As the markets absorb the latest Brexit headlines, we have finally seen some EURUSD price action as the pair surges towards 1.18. The two main drivers of the present EURUSD volatility is President Trump changing his mind on a stimulus deal, and rising COVID-19 cases in mainland Europe.

In regard to the upcoming November election, national and state polls have shown that Democrat challenger Joe Biden is increasing his lead against the POTUS. Opinion poll analysis specialists FiveThirtyEight argue that Biden has an 85% of becoming President and The Economist goes even further than that, claiming the former VP has a 92% chance of winning.

Yesterdays session for EURUSD was largely uneventful. The pair opened at 1.1768 and dropped only slightly to close at 1.1753.

Earlier in the week Donald Trump abruptly cut off talks with Democrats regarding a stimulus package and called for stand-alone bills. In response, US equities dropped and the prospect of getting an agreement looked bleak, with even Majority Leader and Kentucky Senator Mitch McConnell noting that some of his colleagues “feel they have already done enough”.

Yet, Trump controversially was quoted on Wednesday saying that he wants to make a “big deal” with US House Speaker Nancy Pelosi. It was also confirmed that Pelosi and Treasury Secretary Steve Mnuchin had a 40-minute phone conversation on whether “there is any prospect of an imminent agreement on a comprehensive bill”.

GBPUSD, which has more receptive to the latest news on Brexit, saw limited price action yesterday. Wednesday saw the pair open at 1.2950, before closing only 7 pips below at 1.1.2943.

As for GBPEUR, the pair managed to maintain its status in the 1.10’s. The pair opened the trading session yesterday at 1.1004 and closed the day at 1.1011.

On the data front, Thursday sees the UK in the spotlight with a plethora of GDP and Production reports being released in the morning. In afternoon, we have Labour reports from Canada and Wholesale Inventories from the US.

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