The dollar held firm amid a fierce US election debate
Sterling fell against the US dollar on Tuesday as Bank of England Governor Andrew Bailey warned that an economic recovery may not be straight forward with a lot of complications facing the British economy. With the prospect of a second wave of Covid-19 and the possibility of a no deal Brexit, Bailey believes an economic recovery may not be as strong going forward and did not rule out using sub-zero interest rates if required.
Andrew Bailey speaking in an online speech also stated that British economic activity was 7-10% lower during the period from July-September than previously before the pandemic. He did state that the central bank was realistic about changes to the current banking system.
The pound received some optimism at the start of the week as analyst were becoming hopeful that a UK-EU agreement could be reached soon. Talks are set to resume this week where the joint legal text of trade agreement will be spoken about in detail. This will cover energy links and transport. EU negotiators have signalled that they are willing to begin work on a joint legal text of trade agreement.
The dollar held firm on Tuesday as investors accessed a fierce first debate between Donald Trump and rival Joe Biden ahead of the November 3rd US presidential election. In a pivotal debate, the candidates battled over the president’s leadership on the coronavirus pandemic, the protests across states, the economy and taxes.
Furthermore data showed US consumer confidence rebounded more than expected in September as households’ views of the labour market improved. Consumer confidence improved from 86.3 to 101.80 but this left the dollar unchanged as the main focus was on the debate.
Lastly US house speaker Nancy Pelosi said on Tuesday she hoped to have a coronavirus aid deal with the White House this week. It is reported that a 2.2 trillion dollars fiscal stimulus bill will be unveiled to help support the suffering US economy.
- 08:20 – EUR – ECB President Lagarde Speak
- 13:15 – USD – ADP Non-farm employment; expected to increase to 650k from previous 428k
- 13:30 – USD – Final GDP Figure QoQ; expected to remain at -31.7%
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