Let us track the changes in the market. Markets turned risk-averse concerning a surge of virus cases and new lockdown measures in Europe. Thus, on Tuesday, the United States dollar rose to six-week highs. It extended gains from the previous session.
On Monday, stocks sold off, and the currency market saw ‘risk-off’ moves. Thus, the United States dollar index climbed to its highest in six weeks.
On Tuesday, European Equities opened higher. Nevertheless, riskier currencies fell, and the United States dollar continued its ascent. It happened because new lockdown measures appeared to strike the second wave of coronavirus infections. Thus, it poses a threat to global economic recovery.
The United Kingdom will see further restrictions on Activity. Nevertheless, Prime Minister Boris Johnson will most probably stop briefly announcing a full national lockdown like imposed in March.
In Madrid, Spain, the army has been asked to help with the battle against a coronavirus surge. Moreover, last week, restrictions were announced in other European countries.
United States Dollar and Other News
You-Na Park-Heger works at Commerzbank. She is an FX analyst there. So, she said that the terms “lockdown” and “second wave” have been with us for a while. Nevertheless, so far, the markets reacted only moderately cautious about the negative news flow.
Park-Heger added that the situation seems to be deteriorating, particularly in Europe. At this stage, the markets seem to be getting nervous.
Park-Heger said that the possibility might weigh on market sentiment for some time, even though Commerzbank does not forecast more extensive lockdowns.
She said that the rapid correction of yesterday’s move is unlikely to be seen any time soon.
At 0739 GMT, the United States dollar was up 0.3% at 93.848. Thus, it reached six-week highs in early London trading.
The Australian dollar fell 0.5% to 0.7185. it as a one month low.
Riskier currencies extended their losses. Per the United States dollar, the New Zealand dollar dropped 0.4% to 0.6643.
That is the current news of the market.