Let us check the market. Over the weekend, in the United States and Beijing, case numbers spiked. Thus, the “risk-off” sentiment that is dominating markets is driven in part by fears of a second wave of COVID-19 infections. Commodity currencies fell because of that. Nevertheless, the United States dollar rose.
On Monday, Beijing reported its second consecutive day of record numbers of new infections. On Saturday alone, the United States reported more than 25,000 new cases.
The United States dollar surged overnight against a basket of currencies. In early London trading, the greenback was steadying somewhat and was up by 0.2% on the day by 0700 GMT.
Against the U.S. dollar, the Australian dollar was down around 1%. The Kiwi decreased by 0.7%. Both currencies hit their weakest levels in over a week.
Despite the risk-off mood, against the dollar, the safe-haven Japanese yen did not strengthen. As a result, it was at 107.28. against the euro. The Swiss franc was still relatively weak against the Euro, at 1.0723.
The United States Dollar
Many analysts attributed the dollar’s power to fears of a second wave of the virus. Ulrich Leuchtmann works in Commerzbank. He said that there had long been stories of new infections. There is also the fact that other safe-haven currencies did not strengthen. Thus, this suggests that the rise of the dollar is more a product of its recent weakening, added Leuchtmann. Ulrich Leuchtmann is also the bank’s head of FX and commodity research.
In his view, the situation is still much more trivial. It is now the period for profit-taking and a correction, following this pronounced period of the United States’ dollar’s weakness.
For the second consecutive month, in May, Industrial output in China rose. Nevertheless, the rise was smaller than forecast. Thus, this suggests that the second biggest economy in the world is struggling after containing coronavirus.
This is the current news for today.
