October 5-9, 2020. New trends

2020-10-03

Next week, political news will become the main factor in the formation of trends in the Forex market, which increases the unpredictability of movements in currency pairs.

On Monday morning, the final of the last Brexit talks. So far, there are no agreements between Great Britain and the European Union. In the near future, a direct dialogue between the head of the European Commission and the British Prime Minister will take place today. It is also possible to extend the terms of negotiations until mid-October.

Donald Trump’s health is another factor of uncertainty. The head of state, diagnosed with Covid-19, was hospitalized, which raises many questions about the election race, timing and format of the elections. If Trump’s health deteriorates to a critical state, the dollar will strengthen for several days in a row.

The Fed Minutes and the economic aid package stuck in the US Congress round out the list of uncertainties for the coming week.

According to investors, the US economy needs additional incentives, hints of which will be sought in the Fed’s documents. The finance minister recently announced that he is close to completing talks on an aid package with Democrats. However, this is far from the first such statement by White House officials.

If the above factors turn out to be untenable, then the rest of the next week’s events can stimulate a return of growing trends in major currencies. Speeches by the heads of the world’s leading Central Banks and the IMF will reduce the demand for the dollar as a protective instrument, returning investors to risk appetite. In the forecasts of economists, there will be hope for a more favorable end of the year in terms of economic indicators.