Fresh COVID-19 restrictions to contain a surge in coronavirus cases in Europe raising doubts about a steady recovery.
Countries across the continent are facing a resurgence in COVID-19 cases after successfully slowing outbreaks early in the year. EU health officials warned on Thursday of “twindemic”, as a surge in COVID-19 cases in Europe risks combining with flu infections.
The UK Finance Minister Rishi Sunak announced a new scheme to support jobs as COVID-19 cases surged again. But he warned that the government will support only “viable” employment.
Earlier this week, surveys of purchasing managers pointed to a slowdown in services sector activity in the United States and Europe.
The economic picture in the U.S. remains clouded. Though the strongest sales of single-family homes in nearly 14 years in August helped to revive some faith in the recovery.
A top U.S. lawmaker said Democrats were working on a $2.2 trillion coronavirus stimulus package that could be voted on next week. However, experts say that the talk of more U.S. stimulus ahead of the November Presidential election is likely a “showboat”.
G7 finance ministers are expected on Friday to signal their support for extending a debt relief programme to help the poorest countries.
Riskier currencies erased some of their weekly losses. Although investors remain cautious over the upcoming U.S. elections, a return to the dollar surge of March is not expected.
START TRADINGForex – Fresh COVID-19 restrictions in Europe propel markets
The U.S. dollar cemented its best run since April. The dollar index was down less than 0.1% on the day at 94.246. But it was up 1.3% on the week – its biggest weekly jump in nearly six months.
The dollar was hovering near Thursday’s two-month highs, at 105.40 versus the yen.
The New Zealand dollar rose to 0.6584, up 0.6% since New York’s close but still down 2.6% on the week.
The Australian dollar rose 0.5% to as much as $0.7086 at 0724 GMT. But the Aussie was still having its worst week against the dollar since March.
The euro headed for its worst week since peak coronavirus panic. The greenback pushed the common currency down to $1.1656 on course for its worst week since the start of April. The single currency rose 0.1% on Friday to $1.1676, but is down 1.4% on the week.
The Swiss franc gained around 0.1% against the euro.
The pound rose against both the dollar and the euro on Friday. Investors hoped Britain’s new scaled-back job support scheme will be followed by other stimulus measures.
Versus the dollar, sterling was up 0.3% at $1.2784 by 0823 GMT, after hitting a two-month low of $1.2676 on Wednesday.
Against the euro, sterling was also up 0.4% at 91.24 pence. It hit a one-week high of 91.13 on Thursday.
The dollar’s strength this week has also battered commodities, with gold set for its worst week in more than a month. On Friday, spot gold was steady at $1,865.16 per ounce.
Oil prices fell on Friday and were set for a weekly decline due to mounting worries about the impact on fuel demand of a widespread resurgence in coronavirus infections.
PLEASE NOTE The information above is not investment advice.
Sources: Reuters, Investing, CNN money