Concerns about fresh pandemic lockdowns following another COVID wave in Europe dented the recent positive sentiment towards smooth economic recovery.
As another COVID wave remains a major concern for the investors, the lack of any positive news in the near-term impedes markets to rebound. In addition, the COVID-19 vaccine trial results loom as next big market risk, as investors await clinical data on whether they actually work.
Disappointing results could further shake markets. Even if a vaccine is approved, questions persist about how easily and quickly it can be distributed.
156 nations have joined a global scheme for fair distribution of future vaccines against COVID-19. The alliance is led by the World Health Organization (WHO). But superpowers China and the United States did not sign up.
New pandemic measures in the UK spurred fears about further restrictions. The Telegraph newspaper reported Prime Minister Boris Johnson will encourage Britons on Tuesday to go back to working from home. Any fresh coronavirus restrictions would threaten a nascent recovery.
Concerns are also growing about a delay in stimulus measures in the United States. The U.S. Congress has remained deadlocked for weeks over the size and shape of another coronavirus-response bill.
Further, global banking stocks remained under intense pressure on reports about banking institutions allegedly moving illicit funds.
The Federal Reserve Chairman Jerome Powell reaffirmed that FED remains committed to using all the tools at its disposal to help the U.S. economy recover. U.S. Fed Chair Jerome Powell will speak at a congressional committee from 1430 GMT.
START TRADINGForex – Another COVID wave in Europe makes investors nervous
Japanese markets were closed for a public holiday. Stocks sold off on Monday and the currency market saw “risk-off” moves, with the dollar index climbing to its highest in six weeks.
The dollar index was broadly flat on the day at 93.532 at 1102 GMT, still up 0.6% on the week.
The Japanese yen, which backed off a six-month high as the dollar gained, crept higher to 104.51 per dollar. Τhe dollar resumed its recent pattern of losing out to the yen, with dollar-yen down 0.2% at 104.460. The Japanese currency has been among the best performing majors this month.
The New Zealand dollar was up 0.1% at 0.6676, reversing earlier losses.
The Australian dollar which fell to a one-month low at 0735 GMT, was flat on the day at 0.7224 per dollar at 1104 GMT. A senior central banker flagged the prospect of policy options including currency market intervention and negative interest rates.
The euro was down 0.1% against the dollar at $1.17555.
The pound recouped losses after slipping to two-month lows against the dollar on Tuesday. Sterling recovered as much as 0.08% to $1.2826 against the dollar. The pound was at 92 pence against the euro.
In commodity markets, U.S. crude rose 0.48% to $39.5 per barrel while Brent gained 0.36% to $41.59.
Gold fell against the rising dollar, and last traded at $1,908.76 per ounce.
PLEASE NOTE The information above is not investment advice.
Sources: Reuters, Investing, CNN money