China re-introduced restrictions in some areas after Beijing reported its biggest cluster of new infections since February. Several districts of the Chinese capital put up security checkpoints, closed schools and ordered people to be tested for the coronavirus.
The recent outbreak in Beijing revived fears of the economic damage from the health crisis. In the United States, more than 25,000 new cases were reported on Saturday alone.
This latest development of the fresh wave has led investors to reassess the chances of a swift V-shaped recovery.
European countries eased some border controls on Monday following coronavirus lockdowns. This move could help salvage part of the summer season for Europe’s battered travel and tourism industry.
Germany’s economic output will fall further in the second quarter than in the first, according to its economy ministry. Europe’s largest economy faces its worst recession since WWII after the economy contracted by 2.2% in the first quarter.
Industrial output in China rose for a second consecutive month in May, but the rise was smaller than expected. The world’s second-biggest economy is struggling to get back on track after containing the coronavirus. Chinese retail sales fell 2.8%, missing expectations, in a sign of weak domestic demand.
The Bank of England and the Swiss National Bank will hold meetings on Thursday and are expected to keep their main policy rates unchanged.
START TRADINGForex – Fresh virus wave revived slow recovery fears
Fears that a second wave of COVID-19 infections is under way sent jitters across global markets. Investors bought into safe havens.
Against a basket of currencies, the dollar rose overnight, gaining 0.4%. The greenback then erased some gains and was at 97.12.
The safe-haven Japanese yen held firm against the dollar and was little changed from Friday’s close at 107.36.
The Australian dollar fell to a 13-day low versus the dollar in early London trading before erasing some losses to 0.6805, down 0.7%.
The New Zealand dollar was down 0.4% NZD=D3.
The euro slipped 0.1% against the dollar to $1.1249.
Sterling sank against the dollar and euro on Monday as fears of a second wave of coronavirus hit risk sentiment. Investors are also nervous ahead of a key meeting on Brexit negotiations.
The pound also took a beating, falling for a third straight session, and down 0.3% against the dollar at $1.2501. It also fell 0.2% to the euro, at 81.91 pence.
Brent crude futures fell 0.7%, to $38.47 a barrel. U.S. West Texas Intermediate crude futures were down 1.7% at $35.65 a barrel.
Oil investors await OPEC+ committee meetings later this week that will advise the producer group and its allies on output cuts.
PLEASE NOTE The information above is not investment advice.
Sources: Reuters, Investing, CNN money