US Dollar Divided Between Q3 Corporate Earnings, Virus Spike, US GDP Data

US DOLLAR TECHNICAL FORECAST – BEARISH

  • US GDP data for the 3rd Quarter might be strong, but the 4th Quarter will face tougher times ahead
  • Delay in fiscal aid might trigger risk aversion, drive havens
  • Strong corporate earnings can punish the haven associated US Dollar

Q3 CORPORATE EARNINGS

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3rd quarter corporate earnings report from pharmaceutical, energy, industrial, and technology giants to be scrutinized closely by investors. Some of the big brands include Caterpillar, Ford, Boeing, Airbus, GE, Deutsche Bank, Visa, Credit Suisse, Royal Dutch Shell, Petrobras, Exxon Mobil, Chevron, Gilead, Pfizer, Twitter, Alphabet, Apple, Facebook, and more.

In the past one week, Tesla largely overpassed the earnings hopes and saw the uncertain stock surge by 5% in a day. On the other hand, Military Goliath Lockheed Martin’s stock dropped on the soft guidance of 2021 despite beating the earnings. The mixed earnings didn’t help the S&P 500 that ended the week on a negative zone as continuing US Fiscal aid negotiations rattle the sentiment and undermine risk demand.

US GDP Report Surveys

US GDP

It is highly likely that the same dynamic might be reflected next week, possibly setting the equity index higher alongside other indices for a new week of losses. The US Dollar might surge at the expense of the growth linked benchmarks, although incase some progress is made on these fiscal talks besides the strong earnings data, this dynamic might reverse as US Dollar Plunges As Markets Seek Certainty on US Fiscal Stimulus.

US GDP DATA

Flash US GDP is on the cards and is highly expected to show the quarter on a quarter number of 32% on a yearly basis after a -31.4% contraction in the next trading session. A strong rebound might have come from the strong monetary and fiscal stimulus, the impact that not be found as the strong fourth-quarter readings. A highly robust figure might punish the USD incase it buttresses the risk appetite, but the stormy winds blow the horizon.

CORONAVIRUS CASES THREATENING TO DISRUPT THE FRAGILE RECOVERY

Another crucial stipulation of the 3rd quarter strong growth had much to do with gradual ease of the lockdown restrictions that allow some level of economic stabilization. Nevertheless, with the rising covid-19 cases across the globe rising again, the possibility of additional lockdown restrictions is haunting traders. The fears of slower growth alongside political volatility from the US election might cushion the USD drop incase it triggers the flight to safe havens.

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