The main market motor last week was the risk-related sentiment, centred around a US stimulus bill and a post-Brexit trade deal. The cherry on the cake was the announcement on Friday that US President Donald Trump and wife Melania contracted COVID-19. The EUR/USD pair bottomed for the week at 1.1614 and headed into the weekend trading at around 1.1720. The shy recovery cannot grant additional gains ahead, FXStreet’s Chief Analyst Valeria Bednarik briefs.
Key quotes
“Trump’s health took over the news feeds, overshadowing a dismal US Nonfarm Payroll report. According to the official release, the US added 661K new jobs in September, much worse than the 850K expected. The unemployment rate in the same period ticked down to 7.9% from 8.4%, beating the 8.2% expected.”
“Expectations mounted ahead of the first US presidential debate between Trump and Biden, providing little of substance to investors. It was a spat which didn’t lack mockery and interruptions. The only thing worth highlighting is that Trump refused to say that he would accept the election results, as he has repeatedly been saying that mail-in ballots will lead to a rigged election.”
“ECB’s President Christine Lagarde mounted on the verbal intervention train, as she said that ‘it is clear that the external value of the euro has an impact on inflation.’ Lagarde paved the way for more stimulus, indicating that the central bank stands ‘ready to adjust all of its instruments, as appropriate, to ensure that inflation moves towards its aim in a sustained manner, in line with its commitment to symmetry’.”
“This week kick-starts with the final versions of the September Markit Services PMIs for the EU and the US, and the official ISM Services PMI for this last, foreseen at 56 from 56.9 in the previous month. Next Wednesday, the FOMC will publish the Minutes of its latest meeting. The document has little chances of having a relevant impact on the market.”
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