US dollar drops – hope for Brexit deal drives sterling by Investing.com

© Reuters.

From Peter Nurse

Investing.com – The dollar fell at the start of European trading on Wednesday as the surge in COVID-19 case numbers seemingly hurts consumer confidence.

At around 9:55 a.m., the one that tracks the dollar against a basket of six other currencies fell 0.2% to 92.245. The rose by 0.2% to 1.1883, that fell by 0.3% to 103.91, while the risk-sensitive rose by 0.1% to 0.7304.

They rose by a mere 0.3% in October, the lowest they have been in six months. The previous month’s result was revised downwards to 1.6%. It seems that consumers are becoming more cautious with the skyrocketing number of coronavirus cases.

At the same time, there is little evidence that the political dilemma in the US is finally coming to an end. Outgoing President Donald Trump fired Chris Krebs, head of the Department of Homeland Security’s Cybersecurity and Infrastructure Security Agency. He accused him of making a “highly imprecise” statement. As is so often the case, he was unable to provide any evidence.

Spokeswoman Nancy Pelosi and Senate minority leader Chuck Schumer on Tuesday asked Senate majority leader Mitch McConnell to continue talks on a multi-trillion dollar stimulus package. However, it is questionable whether one can agree on anything at all, given the precarious state of US politics.

It climbed 0.3% to 1.3276 after Sun reported that a trade deal between the EU and the UK could be reached “early next week”.

The pair can climb to 1.35 by mid-2021 if the two sides negotiate a free trade agreement, according to a survey of analysts conducted by Bloomberg.

It fell 0.2% to 6.5442, taking the yuan to a nearly 29-month high. This was helped by the recently strong Chinese economic data.

The Chinese yuan has appreciated almost 9% against the dollar since late May, despite the central bank taking various measures to limit the yuan’s appreciation.

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