The dollar held firm on Thursday as an increase in coronavirus cases in the United States undermined hopes for a quick turnaround in the pandemic-hit economy and prompted traders to cuts bets on riskier currencies.
New daily U.S. virus cases surged to nearly 36,000 in the latest tally, near a record of 36,426 hit in late April. The percentage of positive results in tests is also climbing.
Also, souring the mood was news that the US is considering changing tariff rates for various European products as part of the trading partners’ aircraft dispute. Additionally, the International Monetary Fund downgraded its economic projections, knocking off some confidence in a recovery.
The risk-averse mood is supportive of the dollar, with the euro retreating below $1.1250 while the British pound also stepped back below $1.2420. Against the yen, the dollar also jumped back to 107.20 yen from a 1 1/2-month low of 106.075 touched on Tuesday.
US Stocks traded lower yesterday, with US indices dropping more than 2% amid a continued rise in coronavirus cases, hospitalisations across the country.
Oil weakened on Thursday, extending the previous session’s hefty losses as record high U.S. crude inventories revived fears of a supply glut amid concerns about a hit to fuel demand from a resurgence in Covid-19 cases. Wednesday’s selloff came after U.S. government data showed crude stockpiles rose by 1.4 million barrels, driving inventories to a record high for a third straight week last week. Gold steadied above the $1,760 level per ounce.
In the European session, the European Central Bank’s meeting minutes release for its June meeting when it decided to boost its bond-buying scheme is closely watched. The level of concern about the economy and explaining that the move was proportional – answering the German constitutional court – are eyed.
Thursday’s US economic docket highlights the release of Initial Weekly Jobless Claims and Durable Goods Orders data. This, along with the final Q1 GDP report and Goods Trade Balance figures for May will influence the USD price dynamics.
US Dollar Gains on Covid-19 Fears – ECB Minutes and Initial Weekly Jobless Claims in Focus
Published on 2020-06-25 08:07
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