The US dollar depreciated 0.6% against a basket of foreign currencies in the week ending Nov. 1, 2019, despite encouraging job-market news and renewed optimism about a trade deal with China. The downward move, which was spread across a wide range of major currencies, indicated that traders focused more on the decline in interest rates and bond yields, which, in turn, could make investing in the US seem less attractive. The British pound was one of the main beneficiaries of the greenback’s weakness—appreciating 0.9%—after the possibility of crashing out of the European Union without a deal had finally been taken off the table. Having said that, short-horizon risk for GBP/USD remained elevated around 7.7%—more than 2 percentage points above that of its biggest rivals—due to the uncertainty surrounding the upcoming general election in the UK on Dec. 12.
Please refer to figure 6 of the current Multi-Asset Class Risk Monitor (dated November 1, 2019) for further details.