Forex Today: Trump's stimulus tweets cause market havoc, FOMC Minutes, Lagarde eyed

Yohay Elam FXStreet

Here is what you need to know on Wednesday, October 7:

Markets are trying to stabilize after Trump tweeted support for several measures, contradicting his previous announcement about ending talks with Democrats. US politics, the Fed's meeting minutes, and a speech by Lagarde stand out.

President Donald Trump tweeted his support for aiding airlines, payroll protection, and sending stimulus checks to all Americans, providing support to markets. His latest comments come after he announced the end of talks on a new relief package with Democrats, triggering a tumble in stocks and gold, while boosting the safe-haven dollar.

More Who will be the next president? Markets seem to care more about Congress' actions (for now)

Before Trump rattled markets, the central bank reiterated its call to provide fiscal stimulus. Jerome Powell, Chairman of the Federal Reserve, called on lawmakers to act and warned of an uncertain path ahead.

FOMC Minutes: The Fed's meeting minutes from its September decision are due out later on Wednesday and may shed light on how policymakers see the economy and how ready they are to enlarge the bond-buying scheme.

See US Federal Reserve Minutes Preview: Rate cuts, stimulus, and more stimulus

Trump continues recovering from COVID-19 and his doctor said that the president is reporting no symptoms. In the meantime, White House adviser Stephen Miller joined a long list of staff testing positive to coronavirus.

VP Debate: Vice President Mike Pence, who tested negative, will debate VP candidate and Senator Kamala Harris late on Wednesday. The encounter between the two has higher significance amid the old age of both Trump and rival Joe Biden.

Recent opinion polls are showing a growing chance of a landslide victory for former VP Biden, and his successor at the job may have a chance to narrow the gap.

See VP Debate Preview: Preventing a landslide Trump loss? Pence may win Harris, narrowing the race

COVID-19 cases continue rising in the old continent, with Germany reporting the highest number of cases since mid-April. Christine Lagarde, President of the European Central Bank reiterated her position that the ECB is not targeting the exchange rate, but taking the euro's appreciation into account. She will speak again on Wednesday and hints of new stimulus are eyed.

Brexit: The latest reports from the EU-UK talks suggest some progress has been made, yet fisheries remain a sensitive topic. GBP/USD is on the back foot amid dollar strength as Prime Minister Boris Johnson is considering additional restrictions to curb the disease.

Cryptocurrencies have stabilized with Bitcoin trading around $10.600.

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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