Breaking News
0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Dollar Edges Higher as Rising Covid Cases Prompts Lockdowns

ForexDec 07, 2020 03:12AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters.

By Peter Nurse

Investing.com - The dollar pushed higher in early European trade Monday, rebounding from multi-year lows as Covid-19 cases continue to mount and lockdowns expand, weighing on the U.S. economic recovery.

At 4:10 AM ET (0810 GMT), the Dollar Index, which tracks the greenback against a basket of six other currencies, was up 0.3% at 90.993, rebounding a touch having hit a 2 1/2-year low of 90.471 on Friday.

EUR/USD dropped 0.1% to 1.2117, having climbed on Friday as high as 1.2177, a level last seen in April 2018. USD/JPY was largely unchanged at 104.11, while the risk-sensitive AUD/USD was flat at 0.7420, not far off its highest level in more than two years.

On Sunday, California Governor Gavin Newsom ordered large parts of the most populous U.S. state to close down again as Covid-19 cases spiked to record levels.

California reported more than 30,000 new cases on Sunday, exceeding the state's previous high, and marked a new record for hospitalized Covid-19 patients. New Jersey, North Carolina, Virginia and West Virginia also announced record one-day rises in new infections.

This wave of cases is likely hitting the U.S. economic recovery, as evidenced by Friday’s non-farm payrolls growing by 245,000 in November, much lower than October’s rise of 610,000, and the smallest gain recorded since May.

However, the gains to the safe haven dollar from this backdrop have been limited, amid growing confidence there will be new fiscal stimulus to boost the U.S. economy as a bipartisan group of lawmakers look to get through a $908 billion bill this week.

Additionally, the U.S. Federal Reserve and the European Central Bank meet this week to set policy, with the ECB seen as more likely to ramp up stimulus.

Elsewhere, GBP/USD dropped 0.9% to 1.3314, retreating from the two-and-a-half year high of $1.3540 seen on Friday, after talks over the weekend stalled over issues such as fishing rights waters around the U.K., fair competition and ways to solve future disputes.

British Prime Minister Boris Johnson and European Commission President Ursula von der Leyen are due to hold a call on Monday evening, but these negotiations appear to be going right to the edge amid reports Johnson is prepared to walk away.

Given the gains sterling has made over the last few weeks, the downside on no trade deal looks substantial. Bloomerg reported the options market is seeing the biggest risk-reversal positions all year in sterling, with large volumes of put options waiting to be exercised in the event of talks breaking down.

Dollar Edges Higher as Rising Covid Cases Prompts Lockdowns
 

Related Articles

Dollar climbs as Evergrande uncertainty percolates
Dollar climbs as Evergrande uncertainty percolates By Reuters - Sep 24, 2021 4

By Chuck Mikolajczak NEW YORK (Reuters) - The dollar rose on Friday and was poised for its third straight week of gains against a basket of major currencies, as uncertainty over...

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (1)
Dietmar Stahl
Dietmar Stahl Dec 07, 2020 5:11AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Most difficult time are now to March
VFor Vendetta
V4Vendetta Dec 07, 2020 5:11AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
... and beyond ;) Simply markets optimism was filled with empty hope. Can not explain new market highs otherwise
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email