USD we saw last week trade in a very small range against nearly all currencies. The markets climbed and fell on rumors but ended the week at near record levels after news of another COVID stimulus package. Currencies dealt on the news as investors sold safe haven currencies (borrowed the currency) and deployed it to other currencies in search of yield but by week’s end there was little change. This week has begun with the USD under pressure, oil unchanged and equities slightly higher.

EUR (1.1815): Nothing too exciting. The tight range remains as the currency is being pushed around by the various cross currency trades. EURGBP is lower while EURYEN is higher, leaving the EUR only slightly higher than Friday! This has been one of the most difficult times for hedgers to consider their next hedge or layer of hedges. These tight ranges give companies time to re-assess their hedge programs.

GBP (1.3040): Following EUR, GBP has traded in a narrow range but it does begin the week above 1.3000. The next major date for Brexit is Oct. 15/16^th. Expect the currency to jump around, being very reactive to rumors and news stories. Key levels to watch: 1.33, 1.37 with support at 1.27 and 1.23.

CAD (1.3133): Oil rallied back to $40 bl. Metals also had a good week, rallying as expectation of a global recovery support them. The result? Higher Canadian dollar versus the USD. Called a “commodity currency” for a reason the CAD follows these markets, as the main exporting oil country to the U.S., and its value correlates strongly with oil. Support for USDCAD is at 1.31 and then 1.29. Resistance roles in at 1.34 and 1.37. With expectations of oil trading near $50 in Q1/21, expect the USD to weaken to 1.20-1.25.

MXN (21.15): The peso gained strength, similar to the Canadian, reacting from stronger commodity prices. Strong levels of support at 20.85 and 19.50 are key going into the election. The peso has been weakening since 2013 and if there is a “blue wave”, as expected, assume those levels tested and broken.

CNY (6.7180): Following the overall USD weakness, CNY gained some strength. The yuan will continue to gain as the election results point to a “blue wave”. 6.55 and 6.20 are good support levels. Lack of real numbers keep the investing community on the sidelines for now. Once the global recovery begins to take a better foothold, CNY should increase more quickly

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