Breaking News
Black Friday SALE: Up to 54% off InvestingPro! Register here
Investing Pro 0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Forex - Dollar in Demand; Euro Awaits Leaders Meeting

ForexApr 21, 2020 03:09AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters.

By Peter Nurse 

Investing.com - The U.S. dollar has edged higher Tuesday, with investors choosing this safe haven amid the coronavirus-inspired uncertainty, especially in the oil markets.

At 3:05 AM ET (0705 GMT), the U.S. Dollar Index, which tracks the greenback against a basket of six other currencies, stood at 100.278, up 0.2%, while GBP/USD fell 0.2% to 1.2414. USD/JPY down 0.2% to 107.42.

The front month May WTI crude contract saw hefty selling Monday, its penultimate trading day before expiry, plunging into negative territory for the first time since trading began as investors and traders desperately sought to avoid delivery given the shortage of storage space for the current glut of oil.

“Oil is off its lows, but a lot of companies are going to get hit and companies could start to fail,” Shane Oliver, head of investment strategy and chief economist at AMP Capital Investors, told CNBC.

“If share prices have a pullback, the dollar could see some gains as a safe haven. The only thing that’s capping the dollar is the Federal Reserve has done more quantitative easing than anyone else.”

The euro is also in focus ahead of Thursday’s virtual meeting of the EU leaders to discuss funding of the economic recovery in the region from the damage done by the coronavirus outbreak.

At 3:05 AM ET, EUR/USD down 0.2% to 1.0841.

German Chancellor Angela Merkel is likely to come under pressure to agree to help finance the recovery through the issuance of joint debt, a subject which has provoked heated discussions in the Eurogroup meeting of finance ministers that preceded Thursday’s videoconference.

On Monday the Spanish government set out its plans to create a 1.5 trillion euro ($1.63 trillion) recovery fund financed through perpetual debt, backed by the EU budget, to aid countries worst-hit by the coronavirus crisis.

Although some reports have indicated that Merkel may be ready to accept this plan, the bond markets aren’t buying it with spreads between the low risk German debt and that of the Italian and Spanish equivalents, the two countries hardest hit during this crisis, at one month highs.

“Covid-19 has proved an unpleasant reminder for the single currency of a key factor: the hesitant European crisis response and the continued lack of a risk-sharing mechanism such as automatic fiscal transfers mean the eurozone is exposed when debt sustainability in any one country is at risk,” said analysts at Danske Bank, in a research note.

Also of note is the two week high for USD/CNY pair following the decision of the Chinese central bank to cut its benchmark lending rate on Monday, for the second time this year, to reduce borrowing costs for companies and prop up the coronavirus-hit economy.

Adding to downside for the yuan was news of the first new cases of coronavirus in the northwestern province of Shaanxi in nearly three weeks.

At 3:05 AM ET, the USD/CNY pair gained 0.2% to 7.0829.

Forex - Dollar in Demand; Euro Awaits Leaders Meeting
 

Related Articles

India rupee sees worst week in seven on new variant
India rupee sees worst week in seven on new variant By Reuters - Nov 26, 2021

By Swati Bhat MUMBAI (Reuters) - The Indian rupee saw its worst week in seven on Friday, while the benchmark 10-year yield closed at its lowest in more than two weeks as concerns...

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.
 
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