The Canadian dollar is trading in the middle of its overnight range with the U.S. dollar opening on a mixed note. Japan’s Nikkei 225 index outperformed the other global indexes. The major European bourses are lower led by the French CAC 40 index falling 1.0%, and U.S. equity futures pointing to a negative open on Wall Street.
Gold prices are a tad firmer, while crude oil is down.
Global markets may be getting nervous over U.S. political developments, or lack thereof. Markets may also be disconcerted by the reports of another 135,428 new U.S. COVID-19 cases reported yesterday. That bad news was offset by the National Institute of Allergies and Infectious Disease Director, Dr. Anthony Fauci, who said that a vaccine might be readily available by April 2021.
The Canadian dollar may have been undermined by the latest International Energy Agency (IEA) monthly oil report. The IEA slashed its 2020 oil consumption forecast to 8.8 million barrels per day, a drop of 400,000 barrels. They also trimmed their Q1 2021 forecasts. The news follows on the heels of the downgrade by the Organization of the Petroleum Exporting Countries of its oil demand forecast, released yesterday. The latest lockdown measures in many parts of Europe are behind the cuts.
EUR/USD is trading choppily with a negative bias in a $1.1760-$1.1819 range. The single currency bottomed out just before Europe opened this morning, and rallied to $1.1819 where it stalled. The selling pressure stems from yesterday’s dovish comments by European Central Bank President Christine Lagarde and follow-up comments today, by ECB policymaker Luis De Guindos. The ECB Bulletin, released today, highlighted downside risks to the economic outlook. German Consumer Price Index data was as expected while Eurozone Industrial Production was on the weak side. The reports were not a factor for traders.
GBP/USD is trading at the bottom of its $1.3134-$1.3227 range on the back of rising fears for a "no-deal" Brexit. There are still several significant issues that are unresolved, and the deadline is approaching. U.K. Q3 Gross Domestic Product grew 15.5% q/q in October. Traders were not impressed as the recent coronavirus lockdown measures mean growth will be worse in November.
U.S. Consumer Price Index and jobless claims data are on tap today. However, the results will not be a trading factor until the political situation is resolved.
Rahim Madhavji is the President of KnightsbridgeFX.com, a Canadian currency exchange that provides better rates than the banks to Canadians
