The risk of contested elections has been pushed further into the background as Trump basically admitted defeat on Thursday saying that he will leave the White House if the Electoral college votes for Biden (which will almost certainly happen). US stocks remain in consolidation mode near all-time highs waiting for more news on the fiscal negotiations, OPEC decision on output quotas as well timeline for mass vaccination in developed economies.

On Thursday we had crucial for the Euro speech by the ECB Chief Economist Lane and release of minutes of the November ECB policy meeting. Both events shed some light on the scale of monetary easing in December and had short-term implications for the Euro exchange rate. According to Lane, there are signs that the cost of credit funds for end borrowers are rising, as indicated by several surveys which assess availability of credit and investment activity. Since European debt markets are generally in good shapes while credit spreads are low, ECB has little need to tweak asset purchases. Instead, the ECB is likely to expand the TLTRO lending program for banks.

Euro will likely discount this measure as it usually responds to something more profound, such as a change in the deposit rate or bond purchases. The chances that FX markets will generally discount December meeting rose as expectations that the ECB will bring out the big guns in December became less relevant. Thanks to this, the EURUSD rate bounced up today.

Adding to this the market received a number of economic updates on Friday, which showed that November lockdown in the EU has less than expected impact on consumer sentiment, business sentiments in the non-manufacturing, in particular the industrial sector:

The readings indicated that the worst has been averted and that the blow to the economy was in line with expectations. At the same time, the index of business climate in the non-manufacturing sector fell more than expected from -11.8 to -17.3 points, against -15.5 points forecast.

Next week, the upward trend in EURUSD is likely to resume, however, an important component for this will be a positive OPEC decision (extension of the current output cuts).

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