Forex Today: Dollar plunges on stimulus, Brexit talks resume

FXStreet Team FXStreet

Here is what you need to know on Thursday, October 22:

The greenback kept losing ground on Wednesday, down against all of its major rivals. Hopes for a US stimulus package kept it in sell-off mode despite the poor performance of equities, as European indexes closed it the red while US ones were able to post just modest intraday gains, but closed the day in the red.

Talks continued between House Speaker Nancy Pelosi and US Treasury Secretary Steven Mnuchin, without a deal. Delayed talks weighed on the market’s mood ahead of the close.

The second wave of coronavirus is hitting Europe quite hard. Curfews are under study in different countries, as a record number of new cases are being reported in Spain, Italy and the UK. Curfews and additional restrictive measures are under study. UK Chancellor Rishi Sunak is to unveil a fourth COVID-19 support package.

In the Brexit front, the UK and the EU agreed to resume trade talks, boosting Pound. GBP/USD soared to 1.3176.

The EUR/USD pair traded as high as 1.1880, ending the day a handful of pips below the level, and retaining its bullish stance.

Gold benefited from the broad dollar’s weakness, surging to $1,931 a troy ounce, finishing the day around 1,925.

Crude oil prices were sharply lower, partially weighed by the soft tone of equities, but also hurt by demand concerns. The EIA reported a 1M barrels´ decline in the week ended October 16, pretty much in line with expectations. The API reported a draw of 3.8 million barrels earlier in the day.

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