Forex Today: Dollar keeps appreciating, UK noise weighs on Sterling – FXStreet
Here is what you need to know on Wednesday, September 23:
The dollar was the strongest, appreciating against most major rivals. The shared currency was undermined by fears that the economic recovery could take longer than anticipated, as a second wave of coronavirus hits Australia. EUR/USD fell towards the current 1.1700 price zone, its lowest in almost two months.
GBP/USD traded as low as 1.2709 and settled a handful of pips above this last. BOE’s Governor Bailey said that mention of negative rates does not imply their use, giving temporal support to the Pound. Also, EU’s Barnier headed to London for informal trade talks, as Brexit negotiations are reportedly going “a bit” better. The pair started retreating after UK PM Johnson announced new coronavirus-related restrictions, which could last for up to six months. However, he said that this was “by no means a return to the full lockdown of March,” as the aim was to cause the minimum damage to lives and livelihood.
US Federal Reserve Chair, Jerome Powell, testified before Congress. His prepared remarks were released way ahead of the event, which had a limited impact on financial assets. He noted that the US economy has remained resilient and that the banking system has held up well during the ongoing crisis. However, he also said that further economic progress would depend if they can control the virus and most likely will need fiscal support.
EU summit scheduled for later this week has been postponed. Market talks suggest that EU´s President Charles Michel has contracted COVID-19.
Wall Street posted a modest intraday advance, following the lead of its European counterparts. The momentum, however, is quite limited and the risk remains skewed to the downside.
Commodities traded quietly, consolidating around Tuesday’s closing levels. Gold is ending the day at around $1,901.00 a troy ounce.
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