Dollar drops on vaccine optimism, clearer US political horizon, Brexit eyed

Here is what you need to know on Monday, November 16:

The market mood is upbeat ahead of Moderna’s vaccine news and the US seems to be moving forward from the elections. A broad Asian trade deal and upbeat Chinse data are also boosting the moment. Brexit talks are reaching another crunch moment while the prime minister is in isolation again. 

Coronavirus: Markets are focusing on hopes that Moderna joins Pfizer and announces upbeat results in its COVID-19 vaccine. Optimism is boosting stocks while the dollar is down across the board. AstraZeneca and Johnson&Johnson are also conducting late-stage tests. 

Investors seem to be shrugging off concerns about the spread of the disease in the northern hemisphere, and especially in the US. Hospitals in several states have hit capacity. 

US politics: President-elect Joe Biden clarified that he does not intend to impose a nationwide lockdown as he prepares to take office. The Democrat is set to announce additional roles in his administration, including Treasury Secretary. 

President Donald Trump seemed to recognize Biden’s victory before retracting. The recount in Georgia is set to end in the next few days and is unlikely to change the result. Additional senior Republicans have urged him to allow a smoother transition and markets are focused on the runoff races which will determine control of the Senate. 

Chinese industrial output beat estimates with an annual increase of 6.9% in October, while Retail Sales disappointed with 4.3%. China, Japan, and 13 other Asia-Pacific countries signed the Regional Comprehensive Economic Partnership (RCEP) which gradually removes trade barriers. 

UK: Prime Minister Boris Johnson is isolating after coming in contact with an MP who tested positive for coronavirus. The PM has reported no symptoms and continues working.

Brexit negotiations continue and both sides aim to reach an agreement by Thursday when EU leaders convene. Some expect progress after Biden’s election and the departure of Dominic Cummings, a senior adviser to Johnson who was the architect of the Vote Leave campaign. 

Christine Lagarde, President of the European Central Bank, and Richard Clarida, Vice-Chair of the Federal Reserve, will speak late in the day. 

Gold has been edging higher, but XAU/USD still trades below the $1,900 level. Bitcoin is trading above $16,000 again, resuming its gains after consolidating beforehand. 

See What you need to know about the dollar in the post-vaccine announcement world

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