Weekly Fundamental Forecast: Risk Aversion Threatens to Define October with Capital and FX Markets on Edge
A notable sense of fear spread through the financial system this past week. Where concern could be attributed to certain asset classes or a fleeting swoon previously, there was little denying the storm brewing through Friday. Now, as stability hangs in the balance, the masses are recognizing the long list of threats we have accumulated these past months.
Crude oil is working on its worst month since 2016 as risk sentiment soured significantly as October comes to a close and a mixed signal is coming from OPEC on potential production.
USD/CAD rallies to fresh monthly highs even as the Bank of Canada (BoC) delivers a hawkish rate-hike, and topside targets remain on the radar as it threatens the bearish trend from June.
A busy week for Sterling traders ahead but the overall market trend will continue to be dominated by Brexit, and that may not be good news for an under-the-cosh British Pound
A dovish tilt by President Mario Draghi at the October European Central Bank meeting pulled the rug on the Euro at the end of the week, paving the way for more downside ahead.
The US Dollar looks likely to continue upward after hitting a 17-month high as its unrivaled liquidity continues to attract demand amid broad-based risk aversion.
Gold has been the beneficiary of a highly volatile equity market this month and the trend could continue if equities fail to stabilize.
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