Let us check the market. Against the United States dollar, the euro has dropped to $1.1232.
Lee Hardman is a currency analyst at MUFG. He wrote, in a note to clients, that more evidence of economic recovery in China is a positive development for the global economy. Nevertheless, market participants understandably remain on edge concerning the risk of further disruption from secondary waves.
On Monday, European countries eased some border controls. This happened after coronavirus lockdowns. Thus, this is a move that can help salvage part of the summer season for Europe’s battered tourism industry.
Financial markets might be in the process of reprising the most-traded exchange rate of the world. Moreover, derivative contracts suggest that the euro can surge by as much as 6% versus the dollar to $1.20 by year-end.
Against the euro, the Norwegian crown hit a 4-week low as oil prices fell.
Dollar and Others
Norges Bank, the Bank of England, and the Swiss National Bank will all hold meetings on Thursday. They are expected to keep their central policy rates unchanged.
In Beijing and the United States, the number spiked over the weekend, meaning new cases were recorded. Thus, there is a fear of the second wave of COVID-19 infections in risk-off sentiment markets. Because of that, Commodity currencies fell. Nonetheless, the United States dollar rose.
On Monday, Beijing reported its second consecutive day of record numbers of new infections. The United States reported more than 25,000 new cases on Saturday alone.
Against a basket of currencies, the United States dollar surged overnight. The greenback steadied in early London trading, and at 0700 GMT, it was up by 0.2%.
The Australian dollar was down by around 1% against the dollar. The Kiwi fell by 0.7%. Both currencies hit their weakest levels in more than a week.
The safe-haven Japanese yen did not strengthen against the dollar despite the risk-off mood.
- Trading Instrument