Forex Today: Dollar’s haven demand back in vogue amid stimulus delay, vaccine trial pause


Here is what you need to know on Tuesday, October 13:

Shrugging-off the Wall Street tech rally, the market mood remained tepid so far this Tuesday, in the face of skepticism over a likelihood of a US fiscal stimulus deal to be reached soon. Further, news that the UK pharma giant, Johnson and Johnson, paused its COVID-19 vaccine trial due to an unexplained illness also powered the risk-off flows.

The Asian stocks traded mostly mixed while the US stock futures slipped on the discouraging vaccine news, which put a fresh bid under the safe-haven US dollar across its main competitors.

EUR/USD remained pressured around 1.1800 amid vaccine news and re-imposition of stricter restrictions in Germany, Spain and France to contain the coronavirus second-wave. New infections in Germany once again top 4000 on Tuesday.

GBP/USD consolidated the early drop around 1.3050 ahead of the UK jobs report. On Monday, BOE Governor Andrew Bailey downplayed expectations of negative interests while UK PM Boris Johnson announced a three-tier system of restrictions for England with the Liverpool region under strictest tier 3. The cable hit five-week highs of 1.3083 despite the looming no-deal Brexit risks.

Gold held the lower ground around the $1915, looking to extend the correction from two-week highs of $1930.

WTI rebounded to test $40 after hitting a five-day low at $39 amid the return of oversupply concerns.

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