Weekly FX Exchange Rates and Market Commentary commencing 28th September 2020

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US Markets surged to close out yet another negative week. Equities are looking for a technical correction, but the unprecedented avalanche of cheap money, refuses to allow stock markets to fall. The flush monetary system has flooded markets with almost free money, looking for a home and a return. Inevitably it flows to equites. The recent bearish stock market, has allowed the US Dollar to resume some safe haven gains. The EUR has fallen to 1.1630, while the GBP slipped to 1.2740, both mired in a resurgence of the coronavirus. The spike in US stock markets, to close out the week, was sparked by a flurry of rumours surrounding a bill for further US fiscal stimulus.

The coming week will be dominated by US politics, with the first US Presidential debate, sparking the final stages of electioneering, for the November 3rd election. There is still plenty of water to go under this bridge. The trade exposed commodity currencies have been hit hard by the resurgent reserve, with the AUD trading 0.7020, while the NZD languishes around 0.6550. These currencies remain seriously vulnerable to any disruption of US/China relations, which is likely, in the lead up to the US Presidential election.

The coming week will focus on US politics and US employment data, as a line on the state of the US economic recovery. The EU are holding an important meeting and the virus will remain a defining market driver. Global markets remain volatile and this will definitely continue, if not accelerate.

Collinson & Co Contact