Covid concerns and fading stimulus hopes boost dollar, weigh on gold, politics eyed

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A risk-off mood has taken over markets as coronavirus cases surge in Europe and the US. Fiscal stimulus talks seem on the brink of collapse in Washington and also weighs on the mood. Next week’s American elections Brexit talks are eyed.

Gold has slipped back under $1,900 amid the risk-off mood. WTI oil has also reacted and fallen out of its narrow range amid concerns about global growth.

Coronavirus in Europe: Several European countries reported record COVID-19 infections and growing pressure on hospitals. Among the most significant developments are a caseload of over 50,000 in France and a new state of emergency in Spain. EUR/USD has fallen off the highs around 1.1850. The German IFO Business Climate and Bundesbank’s monthly report are eyed.

 

Elections: The weekend has been thin on post-presidential debate polls, but so far, challenger Joe Biden remains in the lead against President Donald Trump. An inflow of surveys is likely on Monday and Tuesday. Investors are trying to gauge the chances of a “blue wave” – a victory for Democrats in the battle for the White House and Congress, allowing for a generous relief package.

Over the weekend, cryptocurrencies have consolidated their gains, with Bitcoin holding above $13,000 and Ethereum topping $400.