Though broadly lower now, currency strategists say that the US Dollar is likely to maintain positive sentiment and gain ground against its rivals, especially in the Eurozone where a resurgence of the Coronavirus is weighing on sentiment. However, uncertainty about the upcoming elections, specifically for the US President, means that the greenback is likely to be highly volatile in the run-up to the election. The Pound is under significant pressure after the Prime Minister re-introduced restrictions on businesses in an effort to mitigate the spread of the infection. Similarly, concerns about the virus are rattling sentiment in the Eurozone, as suggested by the latest economic indicators. A consumer confidence survey taken in Germany was worse than expected at -1.6 (against a forecast of a rise to -1.0).
In London trading as of 10:51 am, the EUR/USD is trading at $1.1713, up 0.0624%; the pair has ranged from a low of $1.16717 to a high of $1.17195 in today's session. The GBP/USD was higher at $1.2738, up 0.0181% and off the earlier peak of $1.27484. The USD/JPY was trading at 104.9880 Yen, up 0.06%; the pair ranged from a session trough of 104.844 Yen to a peak of 105.204 Yen.
PMI Data Reflects Struggles in Services Sectors
PMI releases from the Eurozone from earlier today showed a mixed bag of outcomes. While Germany's manufacturing sector showed an improvement in the preliminary October reading to 56.6 against a forecast of 52.5, the composite survey reflected the hard fall in Germany's services sector. The composite reading came in at 53.7, against a forecast of 54.2; the services sector reading was at 49.1, well off the 52.9 that had been expected. Similarly, France and the Eurozone, as well as the UK, saw improvement in their respective manufacturing sectors, while the services sectors continued to struggle. Analysts expect that the PMI releases for the US due out later today will show a similar trend.