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America’s Roundup: Dollar gains as risk assets tumble on rising COVID-19 cases, U.S. election uncertainty, Wall Street ends lower, Gold slides 3%, Oil falls 5% as economic outlook dims with rising virus cases-September 22nd 2020

Market Roundup

•Chicago Aug Fed National Activity  0.79, 1.95 forecast, 1.18 previous     

•Canada Aug New Housing Price Index (MoM)  0.5%,0.3% forecast, 0.4% previous          

•French 12-Month BTF Auction -0.581%,-0.573% previous

•French 3-Month BTF Auction -0.574%, -0.574% previous

•French 6-Month BTF Auction -0.583%, 0.120% previous

Looking Ahead – Economic Data (GMT)

•No data ahead

Looking Ahead - Events, Other Releases (GMT)

•00:30 Australia RBA Assist Gov Debelle Speaks

•02:00New Zealand RBNZ Rate Statement

Currencies Summaries

EUR/USD: The euro declined against dollar on Monday as rising cases of COVID-19 rattled investors. Investors are becoming more cautious about Europe amid a sharp uptick in new COVID-19 cases. Denmark, Greece and Spain have introduced new restrictions on activity and Britain is considering a second national lockdown. The Financial Times, citing two European Central Bank governing council members, reported that the ECB had launched a review of its emergency bond purchase scheme introduced in response to the coronavirus crisis in March. Attention will turn to the state of the euro zone economic recovery later this week, with flash purchasing manager index data for September due on Wednesday. Immediate resistance can be seen at 1.1763(55DMA), an upside break can trigger rise towards 1.1831 (50%fib).On the downside, immediate support is seen at 1.1738 (38.2% fib ), a break below could take the pair towards 1.1648 (23.6%fib).

GBP/USD: Sterling was under pressure on Monday as rising COVID-19 cases prompted Britain to consider a second national lockdown. British Prime Minister Boris Johnson was pondering a second lockdown with new COVID-19 cases rising by at least 6,000 per day in Britain, hospital admissions doubling every eight days, and the testing system buckling. The United Kingdom already has the biggest official COVID-19 death toll in Europe at 41,777 people. Immediate resistance can be seen at 1.2857 (38.2% fib), an upside break can trigger rise towards 1.2911 (5 DMA).On the downside, immediate support is seen at 1.2791(Daily low), a break below could take the pair towards 1.2712 (23.6%fib).

USD/CAD: The Canadian dollar weakened to a five-week low against its U.S. counterpart on Monday as rising coronavirus infections weighed on investor sentiment, while domestic data showed new house prices increasing at the fastest annual rate in more than two years. Global shares fell as renewed lockdown measures in some countries due to the spread of the virus cast doubt over economic recovery. The Canadian dollar was trading 0.4% lower at 1.3254 to the greenback, or 75.45 U.S. cents. The currency touched its weakest intraday level since Aug. 14 at 1.3264. Immediate resistance can be seen at 1.3355 (23.6% fib), an upside break can trigger rise towards 1.3400(Psychological level).On the downside, immediate support is seen at 1.32983 (38.2% fib), a break below could take the pair towards 1.3223 (50% fib).

USD/JPY: The dollar edged higher against the Japanese yen on Monday as investors sought safety of greenback on fears about rising COVID-19 cases and uncertainty surrounding November’s U.S. elections. As investors fretted about the ability of the U.S. Congress to reach an agreement for more fiscal stimulus uncertainty was exacerbated by the death of Friday of U.S. Supreme Court justice Ruth Bader Ginsburg, a liberal icon. The dollar last traded at 104.69 yen, up 0.1% on the day, after hitting 104.00, its lowest point since March 12.Strong resistance can be seen at 104.51 (38.2% fib), an upside break can trigger rise towards 105.00 (5DMA).On the downside, immediate support is seen at 103.98 (Daily low ), a break below could take the pair towards 103.25(23.6% fib).

Equities Recap

European stocks headed lower for a third straight session on Monday, hit by worries about a surge in coronavirus cases in the continent and a slide in HSBC and Standard Chartered following reports alleging the UK lenders of moving illicit funds.

UK's benchmark FTSE 100 closed up by  3.74 percent, Germany's Dax ended down by 4.37 percent, France’s CAC finished the day up by 3.38 percent.                        

Wall Street’s main indexes hit their lowest in nearly seven weeks on Monday as concerns about fresh coronavirus-driven lockdowns and a stalemate in Congress over more fiscal stimulus raised fears about another hit to the domestic economy.

Dow Jones closed down  by  1.84% percent, S&P 500 closed down by 1.16% percent, Nasdaq settled down  by 1.13%      percent.

Treasuries Recap

U.S. Treasury yields moved lower, but recovered from their worst levels of the day as a sell-off in equity markets continued from the prior week.

The yield on 10-year Treasury notes was down 2.8 basis points to 0.666%, after falling as low as 0.648% on the day.

Commodities Recap

Gold slumped over 3% on Monday, sliding to its lowest level in more than a month, as a broader market sell-off driven by uncertainty over more U.S. fiscal stimulus pressured the precious complex along with a stronger dollar.

Spot gold dropped 2.1% to $1,909.05 per ounce, after falling as much as 3.4% earlier in the session, its lowest since Aug. 12. U.S. gold futures settled down 2.6% at 1,910.60.

Oil prices plunged about 5% on Monday, weakening as rising coronavirus cases stoked worries about global demand, and a potential return of Libyan production bolstered oversupply fears.

Brent crude  settled down $1.71, or 3.96% at $41.44 a barrel. U.S. crude   fell $1.80, or 4.38% to $39.31 a barrel. Both contracts were set for their biggest daily drops in two weeks.

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