European markets continued to suffer the spike in coronavirus infections, with measures being taken in France , Spain and Germany, which will damage the economic recovery. ECB President LeGarde, recognised the dire situation and noted the Bank stood ready with measures including interest rates and expanded QE. The suspension of vaccine trials added to gloomy prospects. The EUR crashed below 1.1700, while the GBP fell back to 1.2900, as the safe-haven US Dollar regained upward momentum.
The US markets followed European markets down, but fought back throughout the trading day. Negotiations continue between House Leader Pelosi and treasury Secretary Mnuchin. The prospects for another stimulus/bail-out, is not strong, before the fast approaching Presidential elections. The rising Dollar did not assist the trade exposed commodity currencies, with the NZD falling back below 0.6600, while the AUD plunged under 0.7100. The AUD was not helped by dovish comments by the RBA Governor and a rising Unemployment rate.
Markets will be focused on the US Presidential election, while locally, the NZ National election could impact local markets.