IFX Market Report: Tuesday 3rd November 2020

On Monday, as a result of the UK government imposing a new national lockdown, cable tumbled to a 4-week low. After Prime Minister Boris Johnson made the announcement on the weekend, Michael Gove has also added that the one-month could be extended, while finance minister Rishi Sunak has said he hoped it would be lifted in December.

Yesterdays session saw cable depreciate as low as 1.2854. The pair opened the day at 1.2869 and struggled to gain any momentum in the morning. But with hopes of a post-Brexit trade deal still strong, GBPUSD was able to retract some of the losses it had made before the close and finish the day at 1.2903.

GBPEUR was able to make some subtle gains yesterday as it got back closer to the 1.11 mark. The pair opened the session at 1.1066 and had a brief spell in the 1.11 range before slipping from that handle and closing at 1.1091.

Across the pond, the big day is finally here. With many Americans heading to the polling stations today, it has been reported that almost 100 million mail-in votes have already been made – one of the biggest turn outs in U.S. history. The unusually high number of mail-in voted is likely to slow the electoral process as it could take days to count all the ballots. President Donald Trump has made his disdain for mail-in ballots clear, claiming that he would deploy lawyers if states are still counting votes after Tuesday’s election.

Joe Biden still leads the polls and claims all but one of the battleground states. Analysts have asserted that a Biden win could weaken the dollar as he is expected to increasing spending on stimulus and take a freer approach to trade – which in turn would boost other currencies at the greenback’s expense.

As COVID-19 weighs heavy on the Euro, EURUSD is trading at 1.1650 (10:00 GMT) as tension mount surrounding the outcome of todays election. The pair opened yesterday at 1.1629 and closed just above at 1.1633.

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