Dollar dominates amid Brexit uncertainty and stimulus, US retail sales in focus

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This is what you need to know to trade today Friday, October 16:

The dollar maintains its gains amid growing uncertainty about US fiscal stimulus and the possibility of a collapse in the Brexit negotiations. Rising eurozone coronavirus cases are also hurting confidence. US consumer data is in the spotlight ahead of the weekend.

Fiscal stimulus: President Donald Trump wants a huge aid package in Congress, on top of the $ 1.8 trillion already offered. However, Senate Republicans are willing to allow just $ 500 billion and House Democrats want $ 2.2 billion.

Brexit UK Prime Minister Boris Johnson will announce his decision on whether to continue or abandon talks on future relationships, and GBP / USD is on the defensive.

EU leaders agreed to extend the talks with the UK but did not say they would “intensify” them. In addition, Brussels expects a change from London on state aid and fisheries. Britain’s chief negotiator David Frost expressed his disappointment. If Johnson chooses to keep talking, the pound will go up.

The Coronavirus cases in the euro zone continue to rise and several countries and regions tighten restrictions in an attempt to stop the spread. Jens Spahn, Germany’s Minister of Health, said his country’s contact tracing capacity is reaching its limits. Paris and other cities will be subject to a night curfew. The recent spikes in contagion are weighing on the euro and also on global markets.

Elections in the USA: With the clock ticking towards the Nov. 3 election, the odds are waning and the safe-haven dollar is rising as stocks falter. Aspiring Joe Biden maintains his big lead in national and opinion polls against Trump. Both men participated in parallel televised public events that probably did little to vary the polls.

Democrats have a chance to win the Senate, opening the door to a quick and big stimulus that investors want. However, the race for the upper house is tighter and the markets also fear higher taxes and regulations.

The gold it has been climbing, topping the $ 1900 level.

The figures for United States retail sales for September show moderate increases after August statistics fell short of estimates. The earlier statement sparked accelerated talks on Capitol Hill, but the limited schedule means little chance of a deal. However, consumption is key to the American economy.

Later in the day, the University of Michigan’s preliminary Consumer Sentiment Index for October is forecast to remain around September’s 80.4 figure. It is also a measure of the state of mind before the elections.

The cryptocurrencies have retreated from the highs, with Bitcoin experiencing a sharp decline, trading around $ 11,300 at press time.

Credits: Forex Street

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