COVID-19 on the Rise Again? FX Market Report

Essential Insights

• Asian Equities take a tumble as fears of a second covid-19 wave in US rise.
• The FED sees rates being kept the same until 2022.

Breakdown

• Asian stocks fell overnight amid fears over a second wave of COVID-19 in the US, with states exhibiting a rise in confirmed cases. These losses were amplified when data showed cases surpassing 2 million new cases of the virus appearing in the US, with hospitalization being high especially in Texas.
• 7-day averages (rate of new COVID-19 case average) for California, Georgia, Florida and Texas, are being tested but the current rate of new cases. Arizona and Oregon have already experienced a significant jump over their averages.

• The FED has kept rates unchanged, as expected. Noticeably, future projections and commentary were largely all Dovish, with predictions that there will be no interest rate hikes until 2022. The FOMC also unveiled a $120bn per month purchase of Treasury and agency MBS securities.

• PM Boris Johnson announced further social distancing easing measures, with people being allowed to stay in other households.
• GBP/USD traded higher, with intraday prices moving above the 1.2800 but prices were unable to hold this for long, slipping back down to 1.25, as dollar strength increased.