Forex Today: Covid concerns and fading stimulus hopes boost dollar, weigh on gold, politics eyed


Here is what you need to know on Monday, October 26:

A risk-off mood has taken over markets as coronavirus cases surge in Europe and the US. Fiscal stimulus talks seem on the brink of collapse in Washington and also weighs on the mood. Next week's American elections Brexit talks are eyed.

Coronavirus in Europe: Several European countries reported record COVID-19 infections and growing pressure on hospitals. Among the most significant developments are a caseload of over 50,000 in France and a new state of emergency in Spain. EUR/USD has fallen off the highs around 1.1850. The German IFO Business Climate and Bundesbank's monthly report are eyed. 

US fiscal stimulus: Republicans and Democrats seem to have reached the limits progress was made last week. Politicians began the blame game, apparently trying to score points ahead of the elections. The GOP-controlled Senate is focused on confirming Amy Coney Barret to the Supreme Court. 

Elections: The weekend has been thin on post-presidential debate polls, but so far, challenger Joe Biden remains in the lead against President Donald Trump. An inflow of surveys is likely on Monday and Tuesday. Investors are trying to gauge the chances of a "blue wave" – a victory for Democrats in the battle for the White House and Congress, allowing for a generous relief package. 

More: US Elections: Debates matter but how much?

US covid cases continue rising, breaking infection records above 80,000 daily in recent days. Hospitalizations and mortalities are also increasing with several facilities rationing access to Intensive Care Units (ICUs). Marc Short, Chief of Staff to Vice President Mike Pence, tested positive for COVID-19. 

Vaccine: Reports in the UK suggest that National Health Service staff could receive immunization by Christmas, while others note that distributing a vaccine to the broad global population would take long months. 

Brexit: Chief EU Negotiator Michel Barnier has extended his stay in London, a sign of progress in talks. State aid and fisheries remain the thorniest issues as both sides aim to seal a deal by mid-November. 

Gold has slipped back under $1,900 amid the risk-off mood. WTI oil has also reacted and fallen out of its narrow range amid concerns about global growth. 

Over the weekend, cryptocurrencies have consolidated their gains, with Bitcoin holding above $13,000 and Ethereum topping $400. 

US New Home Sales are on the agenda and economists expect another level above one million annualized. 

See 2020 Elections: Seven reasons why this is not 2016, time to focus on the Senate

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