25.10.2019: USD stuck, EUR remains strong (USD, EUR, GBP, CHF, GOLD)

At yesterday’s meeting, the ECB decided to leave its monetary policy unchanged. Now investors are awaiting the US Federal Reserve’s meeting scheduled on 30 October. Today, the euro advanced to 1.1106 against the US dollar compared to the 1.1104 level set on Thursday. Investors expected the pair to tumble amid Draghi’s words to keep the interest rate at zero or lower it. Now traders are refraining from buying the greenback amid expectations of a key rate cut by the Fed. As a result, the euro is consolidating above the level of 1.11. Despite the weak macroeconomic statistics, the euro managed to hold its positions. According to the GfK research group, the consumer confidence index sank to its lowest level in three years – 9.6 points, while analysts
expected the indicator to remain unchanged. In contrast, the demand for the pound/dollar pair soared up. During the European session, the pound/dollar pair was trading mixed. The British currency was holding at the level of 1.2852. However, it was affected by the news on Boris Johnson’s bid for an early election, fueling fears over Brexit. Today, the USD/CHF pair dropped having lost its early gains. However, later the pair managed to win favor with traders consolidating above the level of 0.9900. After its four-day rally to the weekly high of about 0.9930, the quote stalled. The worsening of market sentiment supported the franc as a safe-haven asset. On the flip side, it put more pressure on the pair. As for risk appetite, it seems to have returned to the market. On Friday, gold gained ground and raised above its two-week high of about $1,508. The precious metal has been heading up for the fourth session in a row. Today, it has grown above its key psychological level of $1,500 per troy ounce amid stronger demand for safe-haven assets. Concern over the reduced growth in the global economy and the risk of an early election in Britain deteriorated market sentiment. At the same time, it increased the demand for gold. In addition, gold prices benefited from the lower yield on the US Treasuries and the weak US dollar. We keep close tabs on the market development. Stay tuned!

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