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FOREX-Dollar gains on U.S. election caution, surging COVID-19 cases

Published 10/31/2020, 03:13 AM
Updated 10/31/2020, 03:20 AM
© Reuters.
USD/CAD
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* Commodity currencies suffer as Brent drops over 10% on the week
* Euro hits 1-month low after ECB promises more support
* Volatility gauges rising ahead of U.S. election
* Graphic: World FX rates in 2020 https://tmsnrt.rs/2RBWI5E

(Recasts, adds new comments, updates prices)
By Gertrude Chavez-Dreyfuss
NEW YORK, Oct 30 (Reuters) - The safe-haven dollar rose to a four-week high on Friday, moving within
narrow ranges, amid jitters ahead of next week's U.S. presidential election and the continued surge in
global coronavirus cases that has forced lockdowns in parts of Europe.
The greenback posted its largest weekly percentage gain since late September, with investors scooping
up dollars due to fears of a contested election and the economic impact of renewed lockdowns in France,
Germany and some regions of Spain.
The United States recorded its 9 millionth case on Friday, nearly 3% of the population, with almost
229,000 dead since the outbreak of the pandemic early this year, according to a Reuters tally of publicly
reported data. Friday's economic data, meanwhile, which showed U.S. consumer spending exceeding forecasts, had little
impact on the currency market. In afternoon trading, the dollar index rose 0.2% to 94.035 =USD . On the week, the index was up 1.4%,
its best weekly performance in more than a month.
"This could well be election jitters although we have had the election on our calendar for a long
time," said Greg Anderson, global head of foreign exchange strategy at BMO Capital Markets in New York.
"It's not as if the probability outcomes have shifted very much this week, but it is possible that
some people saved position squaring up to the last moment. That has pulled euro/dollar lower a little
bit," he added.
The euro fell 0.3% to $1.1643 EUR=EBS , after sliding to a four-week low of $1.1640. The euro remains
pressured overall after the European Central Bank on Thursday flagged further monetary easing in December.
FX volatility gauges for euro-dollar EURSWO=FN and most other major currencies were elevated, with
that in the single currency at more than 10% on Friday.
Ranko Berich, head of market analysis, at Monex Europe said a win by Democratic candidate Joe Biden
over President Donald Trump could improve the outlook for U.S. macroeconomic growth due to better pandemic
management, and "would be mildly positive for the dollar against G10 currencies."
The greenback was little changed against the yen at 104.66 yen JPY=EBS , after rallying overnight
from a five-week trough as it benefited from a rebound in U.S. Treasury yields and broad dollar buying.
Some commodity currencies, meanwhile, took another spill on Friday, capping what for some was set to
be their worst week since the March COVID-19 collapse.
With Brent already down 10% for the week and still on the slide, traders seemed ready to sell anything
linked to crude.
Russia's rouble dropped 0.5% to near 80 per dollar RUBUTSTN=MCX on course for a 4% weekly drop.
Norway's crown NOK= had managed to steady at 9.57 per dollar but only after a near 3.5% weekly skid,
while Canada's dollar CAD= was facing its worst week since April.
Against the Chinese yuan in the offshore market, the dollar fell 0.2% to 6.6945 yuan CNH=EBS .

========================================================
Currency bid prices at 3:06 PM (1906 GMT)
Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid
Previous Change
Session
Euro/Dollar EUR=EBS $1.1645 $1.1672 -0.22% +3.88% +1.1705 +1.1640
Dollar/Yen JPY=D3 104.6750 104.6100 +0.01% -3.68% +104.7350 +104.1500
Euro/Yen EURJPY= 121.90 122.11 -0.17% -0.04% +122.4300 +121.6300
Dollar/Swiss CHF=EBS 0.9171 0.9158 +0.14% -5.23% +0.9172 +0.9140
Sterling/Dollar GBP=D3 1.2956 1.2927 +0.24% -2.30% +1.2987 +1.2900
Dollar/Canadian CAD=D3 1.3321 1.3330 -0.09% +2.52% +1.3347 +1.3280
Aussie/Dollar AUD=D3 0.7026 0.7028 +0.01% +0.17% +0.7072 +0.7011
Euro/Swiss EURCHF= 1.0679 1.0689 -0.09% -1.59% +1.0701 +1.0672
Euro/Sterling EURGBP= 0.8986 0.9026 -0.44% +6.29% +0.9052 +0.8984
NZ NZD=D3 0.6611 0.6626 -0.21% -1.74% +0.6670 +0.6598
Dollar/Dollar
Dollar/Norway NOK=D3 9.5495 9.5350 +0.27% +8.99% +9.5960 +9.4720
Euro/Norway EURNOK= 11.1241 11.1360 -0.11% +13.07% +11.2134 +11.0720
Dollar/Sweden SEK= 8.9029 8.9324 -0.53% -4.76% +8.9470 +8.8502
Euro/Sweden EURSEK= 10.3689 10.4238 -0.53% -0.96% +10.4410 +10.3510

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