While the investors are tired from the coronavirus pandemic topic and reports of the vaccine efficacy inspired optimism, the market’s attention switched to the resumption of negotiations on the US stimulus package.
Media reports that Senate Republican and Democratic leaders have agreed to resume talks on coronavirus relief measures. This news has revitalized stock markets and put pressure on the US dollar. Let me remind you that before the presidential election, two rival camps tried to use this topic in their political struggle for the presidency, but no decision was made.
The American currency is still under the influence of multidirectional factors, which forces the ICE dollar index to consolidate in a narrow range, from 92.23 to 92.50 points. It is negatively affected by any news regarding COVID-19, vaccines, and the revival of the new support measures’ discussion. On the other hand, reports of measures to isolate the population and the number of cases and deaths support its course as a safe-haven currency. In this situation, it is challenging for investors to profit because the intraday ranges of currency pairs are small, not to mention the weekly ones.
Right now, we are witnessing the lack of uncertainty in the financial markets in general and in the currency markets in particular. Markets remain highly volatile and some stock indices are moving sideways with narrow ranges.
Investors continue to wonder about the outcome of the US election, when will the mass vaccination of the population begin and whether the Fed will cut interest rates to negative values or not. But let’s go back to the foreign exchange market. What is happening there now resembles a game of some against others. In response to the news that Brexit’s negotiation process is being slowed down again, some traders sell the pound while others buy it, covering their volumes with more significant ones. And all this happens in the 65 pips range. There is the absence of a definite trend supported by fundamental factors on the market. Many conflicting conditions gave rise to a terrible phenomenon for investors in which currency pairs simply nervously twitch up and down, destroying market participants’ deposits. On this wave, as in 2017, speculators’ interest in cryptocurrencies has blossomed again.
What to expect soon:
Observing everything that happens, I think that, most likely, this state of the market will continue next week