US$ trending lower as European Central Bank stays put on expanding QE. Higher oil prices aiding commodity-based currencies

USD

The U.S. Dollar tumbled overnight as the price of oil and other commodities climbed by over 1.5%. Also worth noting are the results from the Beige Book yesterday afternoon which revealed concerns among businesses over the hectic presidential campaign rhetoric and a slowdown in consumer spending. This week has been dollar-negative thus far as chances of a Fed hike continue to trend downward. Nevertheless, the labor market continues to tighten as Jobless Claims came in lower than expected and Continuing Claims also diminished.
The Bank of Canada kept its monetary policy unchanged and with oil prices improving the CAD is thriving, already up 2.0% in the month of September. U.S. crude oil inventories are lower, a cold winter forecast, and OPEC intervention in the near-future are helping other petrocurrencies as well.

EUR

The Euro is on a roller-coaster ride this morning as market participants react to the European Central Bank’s decision to maintain its interest rates and quantitative easing program at current levels. ECB President Mario Draghi is speaking at the moment, but has already stated that interest rates will stay at 0.0% or lower for a long period of time. The goal is to facilitate inflationary growth and lines of credit. However, the stimulus package was not even discussed by the board, per his comments, and he does not see the need to expand sovereign bond purchases for the time being.

The common currency may not be volatile to ECB action, but Italian banks are in crisis and the political atmosphere is negatively impacting leaders who want to continue as active members of the European Union. Spain might have to conduct a third election to form a government coalition and even German Chancellor Angela Merkel is facing tough opposition in regions of Germany already voting in anti-Euro parties to positions of power.

Euro is currently trading at its highest level since June 23rd.

GBP

The Pound sustained its gains from the past two weeks even after a difficult meeting for Bank of England Governor Mark Carney in front of parliamentary members questioning his decisions post-Brexit. Following accusations that his monetary policy has only managed to help the top 5.0% of income earners in the UK, Carney defended the central bank’s measures as cautious and responsible for receding the risk of a recession following the shocking Brexit result.

Sterling investors seem content at the moment with the fundamentals of the UK economy, although there are serious downside risks as already indicated in the property sector, services, and consumption.