Sterling falls despite progress in Brexit talks
The British Pound fell against the US dollar on Tuesday, despite progress in the Brexit talks between the United Kingdom and the European Union.
Risk assets saw a huge sell-off move today, after US President Donald Trump's remarks to stop negotiation with the Democratic leaders in the US Congress about the second Covid-19 relief package.
Earlier data showed that the UK's construction PMI rose to 56.8 points in August, beating forecasts of 54 points.
The British Prime Minister Boris Johnson stressed the need to intensify the talks talks with the European Union to reach convergence and achieve an agreement that prevents no-deal Brexit.
As of 21:00 GMT, GBP/USD fell 0.6% to 1.2909, after hitting a high of 1.3008, and a low of 1.2891.
The US dollar fell on Wednesday, to resume its losses after pausing yesterday within recovery attempts from a 2-week low, due to slowing demand, and ahead of the release of the Federal Reserve's meeting minutes. The dollar index fell 0.2% to 93.63 points, after opening at 93.83, and hit an intraday-high of 93.90. The index gained 0.4% yesterday, within recovery attempts from a 2-week low 93.34 points. The US dollar shined yesterday as the best alternative investment, after President Donald Trump postponed the new fiscal stimulus talks until after the US presidential election. But soon demand slowed again, as Trump calmed the market's concerns by announcing offering support to airlines and the paycheck protection program, as part of a limited set of incentive measures to support the US economy until the election. Otherwise, the latest polls by Reuters showed that the Democratic candidate Joe Biden have a 52% lead vs. 40% to the Republican candidate Donald Trump. Most investors are preparing for Biden winning the US election, which is expected to lift the US dollar. At 18:00 GMT the US Federal Reserve will release the minutes of its of its September 15-19 meeting, which is expected to provide additional insight on the future of the US monetary policy. The Fed held the US rate between 0.25% and zero during the meeting, and pledged to keep it in this range until at least 2023, until full employment recovery, and adopted an average inflation targeting strategy, that will tolerate it above 2%. While Federal Reserve Chairman Jerome Powell said that he expects economic growth to improve from more than the Fed had previously estimated last June.
The US Energy Information Administration (EIA) showed today that the US crude inventories fell 1.6 million barrels to reach a total of 494.4 million barrels during the past week, missing analysts' forecasts of a drop by 4 million barrels. The gasoline stockpiles fell 4 million barrels to a total of 227.5 million, and distillate stockpiles fell 3.4 million barrels to a total of 175.9 million. While the American Petroleum Institute (API) showed yesterday in preliminary data that inventories rose around 691,000 barrels during same period.
The Canadian dollar rose against most major currencies on Thursday, ahead of the release of Canada's jobs data tomorrow. Lonnie has been lifted by the recovery in oil prices, as oil is a major commodity for Canada's exports and budget revenues. As of 18:09 GMT, WTI October futures at Nymex rose 3.2% to $41.2 a barrel, after hitting a high of $41.2 and a low of $39.7. Brent November futures rose 3.3% to $43.3 a barrel, with a high of $43.4 and a low of $41.8. Canada will release its monthly jobs report Friday, with forecasts that the economy has created 150,000 new jobs in September and for the unemployment rate to fall to 9.8%. As of 18:25 GMT CAD/USD rose 0.4% to 0.7573, after hitting a high of 0.7576 and a low of 0.7533.