- Sterling remains weak despite Brexit talks extended for few weeks.
As fresh curbs to combat COVID-19 were introduced in Europe and Britain, the world’s reserve currency surged to a two-week high of 93.910 against a basket of currencies. It held just below that peak in Asian morning trade. London enters a tighter COVID-19 lockdown from midnight, which with a curfew in Paris leaves two of Europe’s largest cities living under state-imposed restrictions.
The U.S. Midwest is also battling record surges in new cases as temperatures get colder, prompting authorities to set up a field hospital in the suburbs of Milwaukee, Wisconsin, in case of an overflow of patients from hospital wards. The lockdown worries driving the selloff come as hopes for U.S. stimulus before the Nov. 3 election fade and as data shows cracks emerging in the recovery. Weekly U.S. jobless claims rose by more than expected and hit a two-month high last week, increasing concerns the pandemic is causing lasting damage to the labour market. Some 25 million Americans are on jobless benefits.
Sterling was also heavily sold overnight, dropping more than 0.8% to $1.2891 on concerns about the obstacles keeping the European Union and Britain from reaching a Brexit trade deal. Sterling was last at $1.2902.
US Market extends slide after steep rise in jobless claims
The US stock market finished session in negative territory on Thursday, 15 October 2020, as a rise in weekly jobless claims compounded worries about a stalling economic recovery. Meanwhile, sentiments also dampened amid uncertainty about a new stimulus bill after Treasury Secretary Steven Mnuchin suggested on Wednesday that a new relief package is not likely to pass before next month’s elections.
Selling pressure was also generated amid uncertainty about a new stimulus bill after Treasury Secretary Steven Mnuchin suggested on Wednesday that a new relief package is not likely to pass before next month’s elections. Senate Majority Leader Mitch McConnell has also cast doubts on whether a bill can pass before the elections and recently announced plans to vote on a more limited relief package.
TREND : BEARISH
Time : 16/10/2020
Pivot : 1.1716
Technical View : LONG ABOVE 1.1736
Target : 1.1756, 1.1791, 1.1819, 1.1833
Technical View : SHORT BELOW 1.1696
Target : 1.1676, 1.1659, 1.1641, 1.1599