The dollar traded modestly firmer following losses seen on Friday on news that the FBI is investigating new emails of Clinton. The upcoming U.S. Presidential election, which will take place next Tuesday, will dominate market attention from here on in. At least one weekend poll showed Trump to have narrowed the gap to 1 percentage point. The FOMC meets this week, announcing on Wednesday, which we expect to be a non-event given the proximity of the election. USDJPY recovered to the 105.00 area after dipping to a low of 104.41 in the wake of the FBI story on Clinton. EURUSD has ebbed back to the mid 1.09s after logging an 11-day high on Friday at 1.0992. A 27-month high in Eurozone inflation, of 0.5%, had little impact on the euro. Sterling came under modest pressure. While most expect the BoE to refrain from easing at this week’s policy meeting, and to upwardly nudge growth and inflation projections, Brexit uncertainties remain heavy.
The volatility on Friday helped the EURCAD long position (October 26) reach Target 2 at 1.4700, net gain 150 pips; the EURAUD long position (October 27) hit Target 1 at 1.4410, net gain 105 pips and the GOLD long position (October 20) also to hit Target 1 at USD 1281.00, net gain of USD 14.00.
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