March 29, 2024

Alarming new spikes in infections damp mood

LQDFX Forex news Blog | Alarming new spikes in infections damp mood

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The dollar paused on Friday as Alarming new spikes in coronavirus cases in the United States stoked concern about the pace of economic recovery.

More than 60,000 new COVID-19 cases were reported across the United States on Thursday. This was the largest single-day tally by any country in the global pandemic so far. About 41 of the 50 U.S. states have reported an increase in COVID-19 cases over the last two weeks.

Economic data, however, continued to improve in the United States.

Thursday’s weekly data showed the number of Americans filing for initial jobless benefits dropped to a near four-month low last week. There were 32.9 million people receiving unemployment checks, up 1.411 million from the middle of the month.

Big banks are set to report their financial results next week, marking the onset of the second-quarter earnings season.

Further, Canada added some 952,900 jobs in June, mostly in the service sector, Statistics Canada said on Friday. The jobless rate improved to 12.3%.

Also, China’s national security law for Hong Kong and moves by the United States to begin withdrawing privileges have unsettled investors. There are fears that escalating U.S.-China tensions could result in the United States potentially limiting Hong Kong banks’ access to U.S. dollars.

China said it would impose reciprocal measures in response to U.S. sanctions on Chinese officials over alleged human rights abuses against the Uighur Muslim minority.

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Forex – Alarming new spikes in infections damp mood

Many risk-sensitive currencies took a step back following their rally in recent weeks. Investors mostly staying on the sidelines. Investors shed risky assets for the safety of gold.

The dollar index gained in Asian trading hours but later lost momentum and was broadly flat. While economic data continued to improve investors remained cautious.

The caution helped to drive the safe-haven yen up by nearly 0.5% to a two-week high of 106.72 per dollar. The Japanese currency rose 0.4% against the dollar and 0.2% versus the euro.

The Swiss franc, another safe-haven, flirted near a six-week high against the euro, at 1.0619 franc per euro. Against the dollar, the franc changed hands at 0.9419 per dollar after having touched a four-month high of 0.93625 to the dollar.

Aussie and kiwi often traded as a liquid proxy for risk because of their close ties to China’s economy, were both under pressure.

The Australian dollar lost 0.5% to $0.6929, off Thursday’s one-month high of $0.7001.

The euro shed 0.1% to $1.1273, slipping back from a one-month high of $1.1371 on Thursday.

Sterling traded slightly lower versus the U.S. dollar and was unmoved against the euro on Friday. The pound was last flat at 89.61 pence versus the euro and down 0.1% against the dollar at $1.2590.

In commodity markets, oil prices faltered as alarming new spikes raised concerns that more lockdowns may be necessary.

U.S. crude oil fell 1.3% to $39.12 a barrel. Brent crude dropped 1.1% to $41.90 per barrel amid concern about a long-term decline in global energy demand.

Gold did not join the rush-for-safety party, sliding 0.3%, a day after hitting an eight-year high.

PLEASE NOTE The information above is not investment advice.

Sources: Reuters, Investing, CNN money