After weeks of the markets being dominated by three stories, President Trump, Brexit and COVID-19, it seems like we are at last reaching the end game in two of them.
Last week saw the Thanksgiving holiday in the US, which brought about a quiet end of the week in FX markets. To us, this also marks the start of the festive season, with the new (and some might say unwelcome) tradition of Black Friday and Cyber Monday, as a precursor to entering the period of advent tomorrow.
In light of alleged election fraud in the US, the markets turned their eyes back to the narratives of both COVID-19 and Brexit, resulting in a trading in a very narrow range with sterling continuing to fight on regardless of the struggles of Brexit.
With the US election dominating the markets for the whole of last week, the continued fallout from it is expected to carry on driving sentiment for some time, resulting in currencies to remain volatile and until the shape of the Biden Presidency becomes clear.
With the world’s markets waiting for the release of the Non-Farm payrolls data, news of President Trump and his wife Melania testing positive for COVID-19, saw the markets knee jerk reaction was a flight to safety which benefitted the dollar, yen and to a lesser extent the euro.