Forex Today: Dollar bid amid jittery markets, all eyes on key UK-EU Brexit meeting

Here is what you need to know on Wednesday, October 14:

The safe-haven US dollar held onto its recent recovery rally from three-week lows, benefiting from broad risk-aversion amid a pause in the Johnson and Johnson COVID-19 vaccine trial and no sign of an end to the US fiscal stimulus deadlock.

The Asian equity markets flashed red, dragged down by the losses in Hong Kong and Chinese stocks. The Asian stocks tracked its Wall Street peers lower. The US stock futures, however, ticked higher and offered some respite to the higher-yielding Australian dollar.

AUD/USD recovered ground following an early dip to near 0.7150 region. The aussie hit fresh weekly lows after China announced a ban on shipments of Australian coal. NZD/USD outperformed in Asia but remained below the 0.6670 critical barrier. RBNZ's Hawkesby said New Zealand's economy needs continued support while markets ignored comments from China’s President Xi Jinping.

EUR/USD traded lifeless near 1.1750, licking its wounds after Tuesday’s sell-off. Localized lockdowns in Europe’s key economies, amid rising coronavirus cases, and the German ZEW disappointment knocked-off the shared currency. Focus remains on ECB President Christine Lagarde’s speech.

GBP/USD extended Tuesday’s sell-off and neared 1.2900, in the face of no progress between the UK and the EU on a post-Brexit transition trade deal, as they reach the October 15 deadline.  Meanwhile, the virus risks persist, with the UK opposition Labour leader Keir Starmer calling for a two to three-week "circuit breaker" lockdown.

All eyes remain on the key Brexit meeting between PM Boris Johnson and European Commission President Ursula von der Leyen on the ongoing negotiations due later today.

Gold’s rebound remained capped below $1900 mark, consolidating Tuesday’s 2% slide.  

WTI turned south to test $40, as rising demand concerns offset robust Chinese oil imports data. The OPEC cut its 2021 oil demand forecast again on surging virus cases.

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