March 28, 2024

Global surge in COVID-19 cases adds to unease in markets

LQDFX Forex news Blog | Global surge in COVID-19 cases adds to unease in markets

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The global surge in COVID-19 cases fueled demand for safe-haven assets like the greenback. The market sentiment was also sapped by stimulus stalemate.

Europe has seen the number of coronavirus cases surge to a record high. Spain became the first Western European country to exceed 1 million infections. France, Britain and Italy all-seeing recent record increases. The news added to the cautious tone in world markets.

Further, the dollar edged up from seven-week lows as hopes for a fiscal package in the United States before the November elections crumbled again.

Progress towards a U.S. stimulus deal has boosted sentiment in world markets and lifted demand for riskier assets in recent sessions. But U.S. President Donald Trump on Wednesday accused Democrats of being unwilling to craft an acceptable compromise.

It remains unclear whether negotiations will continue ahead of the U.S. presidential and congressional elections on Nov. 3. However, the subject may come up later when Trump and Joe Biden go head-to-head in the final presidential debate.

Uncertainty over the passage of a bill to stimulate a pandemic-ravaged economy comes as the United States also faces a new wave of COVID-19 cases.

High levels of weekly jobless claims suggested a slowing recovery in the labour market. The number of Americans filing for state unemployment benefits last week dropped more than expected to 787,000. But it remained stubbornly high as support from fiscal stimulus faded.

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Forex – Global surge in COVID-19 cases adds to unease in markets

The tone in currency markets was generally subdued as investors waited for new impetus.

The dollar index was last trading at 92.863, a touch firmer on the day. The index was above the 92.469 low hit on Wednesday that marked the lowest level since Sept. 2.

The dollar was firmer against Japan’s currency at 104.73 yen, above a one-month low hit during the previous session.

The Canadian dollar was trading 0.1% lower at 1.3160 to the greenback.

The Australian dollar was 0.3% softer versus the greenback.

The New Zealand dollar was a touch firmer at $0.6658 – up from the $0.6551 low touched on Tuesday.

The euro was a quarter of a per cent lower at $1.18325, down from Wednesday’s one-month highs of $1.18805.

Elsewhere, having hit six-week highs on Wednesday amid Brexit optimism, sterling too pulled back against the U.S. currency. The British pound was last down 0.4% at $1.3093.

Oil steadied after another heavy fall on Thursday, as the global surge in COVID-19 cases a kept financial markets cautious.

U.S. WTI crude futures hovered near $40 a barrel and Brent crude futures were 0.5% higher at $41.19.

Gold eased as the dollar edged up, with spot gold XAU= down 0.4% at 1,916 per ounce.

PLEASE NOTE The information above is not investment advice.

Sources: Reuters, Investing, CNN money