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Currency Market Analysis

Nov 11, 2020 | Currency Market Analysis

Global Themes

USD drifts higher as vaccine, Biden benefits ease

The USD moved higher overnight after a furious fortnight saw markets react sharply to the US presidential election and good news on a potential COVID-19 vaccine.

Global equity markets had recently surged with the US’s Dow Jones index hitting all-time highs on Monday after US firm Pfizer and German firm BioNTech announced a successful vaccine trial.

Markets had earlier seen strong gains after Democratic candidate Joe Biden was announced as President-Elect

GBP jumps

The GBP saw the biggest move overnight, jumping higher, as markets stepped back from expectations for negative interest rates from the bank of England. A major speech is due tomorrow.

More risk sensitive currencies like the Australian and Canadian dollars drifted lower.

RBNZ

Today’s focus is on the Reserve Bank of New Zealand meeting.

The market is looking for further details of on the RBNA’s bank lending facility to help provide a boost to the NZ economy.

Also, any news on the potential for negative interest rates will be key.

As we saw with the GBP overnight, any shift away from the expectations for negative interest rates might boost the NZD.


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