EUR (1.165) ▲

▪ Despite euro-area better-than-expected GDP growth, the EUR settled lower at October's closing as the safe-haven dollar benefited from the worsening COVID-19 situation. The bloc’s currency fluctuated and trend lower after ECB decided to keep its interest rate unchanged while hinted at more stimulus in its upcoming December meeting.

▪ EUR may reverse its downtrendandstrengthen against the US dollar if Joe Biden emerge victorious in the US presidential election. However, increasing COVID-19 infections and rising anti-coronavirus measures in the Europe could limit EUR upside in November.

GBP (1.295) ▲

▪ GBPstrengthenedagainst the USDin October.The poundwas boosted by the resumption of formal Brexit talks between the UK and EU, but this was partially limited by growing fears of a national lockdown following Britain’s spike in COVID-19 infections.

▪ GBP mayadvancein November,ifBrexit negotiationsprogress and if the US presidential election concludes with certainty. However, the recent implementation of a national lockdown, to combat rising COVID-19 cases, could weigh heavily on the sterling.

AUD (0.703) ▲

▪ AUD depreciated on the RBA dovishness and a deterioration in AU-CN relation following news of China’s halt on imports of Australian coals. The commodity-linked currency was also weighed by a global resurgence of COVID-19 cases and the US stimulus stalemate.

▪ AUD could trade higher this month in the case of a Biden victory, with the downside pressure from a potential rate cut by the RBA is expected to be limited as investors seemed to have already priced it in.

NZD (0.662) ▲

▪ NZD gained marginally in October, attributable to the country's success in combating COVID-19 pandemic despite US dollar strength amid surging global coronavirus cases and US election uncertainties.

▪ NZD is expected to appreciate in November primarily bolstered by investor confidence over the nation successful virus containment and China's economic recovery optimism

Source: Kenanga Research - 2 Nov 2020