Forex Today: Dollar retreats on fresh stimulus hopes, Brexit and coronavirus news eyed

Yohay Elam FXStreet

Here is what you need to know on Tuesday, October 20:

After a down day on Monday, stocks have stabilized, and the safe-haven dollar retreats on reports that US officials made progress toward a fiscal deal. On Brexit, the UK still demands concessions from the EU. US housing figures and political headlines toward the debate are eyed.

Fiscal stimulus: House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin have reportedly been narrowing their differences after holding a long call. On the other hand, there are still differences. Moreover, and any bill would have to receive support from Senate Republicans, which are pushing forward their own "skinny" bill.

Pelosi set a deadline for the end of Tuesday, and headlines coming from President Donald Trump, and other officials are set to rock markets. Gold has been flirting with the $1,900 level in anticipation of news on the fiscal front.

Elections: The president continues trailing challenger Joe Biden in opinion polls, three days ahead of the final encounter between the two men. According to RealClearPolitics, the former Vice-President is leading with 8.9%, and models by FiveThirtyEight, and The Economist suggest 90% for Trump to be ousted.

Brexit: The EU and the UK are in contact but have yet to officially resume negotiations. London wants Brussels to announce more concessions before agreeing to intensify the talks. GBP/USD has retreated from the 1.30 level.

Prime Minister Boris Johnson is set to slap restrictions on the Greater Manchester area following a surge in COVID-19 cases and a clash with the local authorities. Wales announced a strict lockdown while London remains under relatively looser rules.

Coronavirus is raging in the old continent with several countries and regions announcing more restrictions. Authorities in Belgium warned of a "tsunami" in cases. Christine Lagarde, President of the European Central Bank, warned that the recovery could stall. EUR/USD has been mostly responding to US fiscal stimulus news rather than eurozone coronavirus cases.

Vaccine: Moderna said it would present interim results from its Phase 3 immunization trial in November and would later seek approval from the US Food and Drugs Administration. Pfizer is also set to publish results around the same time.

The economic calendar features US Building Permits and Housing Starts. John Williamsn, President of the New York branch of the Federal Reserve, is slated to speak later on.

Oil prices have been stable, with WTI holding just above $40.

Cryptocurrencies have been extending their gradual advance. Bitcoin is consolidating its recent gains above $11,700.

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

Author

Yohay Elam

FXStreet

Yohay is in Forex since 2008 when he founded Forex Crunch, a blog crafted in his free time that turned into a fully-fledged currency website later sold to Finixio.

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