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

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Feed news Join Telegram

Recommended content


Recommended content

Editors’ Picks

EUR/USD extends recovery above 1.0350 ahead of EU inflation, Powell

EUR/USD extends recovery above 1.0350 ahead of EU inflation, Powell

EUR/USD is extending recovery gains above 1.0350 in the early European morning this Wednesday. The US Dollar retreats further amid a better market mood. All eyes remain on the Eurozone inflation, US ADP and Fed Chair Powell's speech. 

EUR/USD News

GBP/USD recovers from 1.1940 as US Dollar refreshes day’s low, Fed Powell’s speech eyed

GBP/USD recovers from 1.1940 as US Dollar refreshes day’s low, Fed Powell’s speech eyed

GBP/USD has sensed responsive buying action around 1.1940 as risk aversion loses luster. The Bank of England is expected to advance its interest rates to 4.25% in Q1CY2023. GBP/USD has gained strength after testing the 200-EMA around 1.1960.

GBPUSD News

Gold bulls seek validation from $1,760 and Fed Chair Powell

Gold bulls seek validation from $1,760 and Fed Chair Powell

Gold price remains firmer for the second consecutive day, bounces off 10-DMA, short-term key support. Fed Powell’s first speech after November, hawkish hopes tease Gold sellers.

Gold News

Three on-chain metrics suggest Bitcoin price has bottomed, here’s where BTC is going next

Three on-chain metrics suggest Bitcoin price has bottomed, here’s where BTC is going next

Bitcoin price action has spiked 5% over the last 24 hours, hinting at the start of an optimistic scenario. Previous publications have already explored why BTC is ready for a bear market rally from both short-term and long-term outlooks.

Read more

Eurozone Inflation Preview: EUR/USD fate hinges on confirmation of peak inflation Premium

Eurozone Inflation Preview: EUR/USD fate hinges on confirmation of peak inflation

ECB President Christine Lagarde told European lawmakers on Monday that Eurozone inflation hasn’t peaked after reaching the highest levels on record in October. Will the Preliminary Eurozone inflation print confirm a peak in inflation?

Read more

Forex MAJORS

Cryptocurrencies

Signatures