Dollar Lower Ahead Of U.S. Presidential Debate
September 29 2020 - 3:51AM
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The U.S. dollar dropped against its most major opponents in the
European session on Tuesday, as investors awaited the first debate
between President Donald Trump and Democratic nominee Joe Biden
later in the day.
The debate will be held at Case Western Reserve University in
Cleveland at 9 pm ET.
Investors speculate that Biden victory will raise the likelihood
of further fiscal stimulus to offset the economic damage from the
coronavirus pandemic.
Also in focus is ongoing stimulus talks in Washington as
Democrats unveiled a new $2.2 trillion bill on Monday night.
House Speaker Nancy Pelosi is set to hold further talks with
Treasury Secretary Steven Mnuchin on Tuesday morning.
The economic calendar features the Conference Board's consumer
confidence data and S&P/Case-Shiller home price index.
European markets fell, with coronavirus worries and
Brexit-related news flow keeping underlying sentiment cautious.
The greenback dipped to 1.2888 against the pound, compared to
Monday's closing value of 1.2829. On the downside, 1.31 is likely
seen as its next support level.
Data from the Bank of England showed that UK mortgage approvals
increased to the highest level in nearly 13 years in August as the
housing market gained momentum after the easing of lockdown
measures and stamp duty reduction.
The number of mortgages approved for house purchases increased
sharply to 84,700 in August from 66,300 in July. This was the
highest number since October 2007 and above economists' forecast of
73,000.
The greenback hit a 6-day low of 1.1709 against the euro, down
from yesterday's closing quote of 1.1664. Next key support for the
greenback is possibly located around the 1.20 region.
Survey data from the European Commission showed that Eurozone
economic confidence index reached a six-month high in September
driven by waning pessimism in industry, retail trade, construction
and services.
The economic confidence index rose to 91.1 in September from
87.5 in August. This was the highest score since March and above
economists' forecast of 89.0.
The USD/CHF pair touched 0.9214, its lowest level since
September 23. If the greenback declines further, 0.90 is possibly
seen as its next support level.
The U.S. currency depreciated to a 4-day low of 1.3352 against
the loonie, 6-day lows of 0.6595 against the kiwi and 0.7128
against the aussie from Monday's trading close of 1.3392, 0.6550
and 0.7069, respectively. The greenback is likely to test support
around 1.29 against the loonie, 0.68 against the kiwi and 0.74
against the aussie.
In contrast, the greenback approached a 2-week high of 105.71
against the yen, compared to 105.45 hit late New York Monday. The
dollar is seen finding resistance around the 108.00 mark.
Data from the Ministry of Internal Affairs and Communications
showed that Tokyo overall consumer prices rose 0.2 percent on year
in September.
That was shy of expectations for an increase of 0.3 percent,
which would have been unchanged from the August reading.
Looking ahead, at 8.00 am ET, Destatis is scheduled to issue
Germany's flash consumer prices for September.
In the New York session, Canada industrial product price index
for August, as well as U.S. wholesale inventories and advance goods
trade balance for the same month, S&P/Case-Shiller home price
index for July and consumer confidence index for September are due
out.
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