Growing concerns about a new wave of COVID-19 cases globally crushed hopes of a quick global economic comeback and underpinned safe-haven demand.
China’s capital cancelled scores of flights, shut schools and blocked off some neighbourhoods. Beijing ramped up efforts to contain a coronavirus outbreak that has fanned fears of wider contagion.
Several U.S. states including Oklahoma reported a surge in new coronavirus infections on Wednesday. However, Trump said that the United States would not close businesses again.
Further, some 400 workers have tested positive for the new coronavirus at an abattoir in northern Germany. New wave of infections globally called attention to the risks of re-opening economic activity before the development of a vaccine.
U.S. Federal Reserve Chair Jerome Powell told lawmakers on Wednesday that although the world’s largest economy is beginning to recover, with some 25 million Americans displaced from work and the pandemic ongoing, it will need more help.
After recent data showed a record rise in U.S. retail sales, investors will now look to the Labor Department’s weekly jobless claims report.
Border tensions between North and South Korea, and between India and China, also helped sour sentiment for risky assets.
The Bank of England meets on Thursday. The British central bank may probably announce an increase of at least 100 billion pounds in its bond-buying programme. Analysts predict an even larger increase. Investors will also watch for hints of negative rates from the BoE.
In Switzerland, the Swiss National bank is widely expected to leave the policy rate unchanged at minus 0.75%.
START TRADINGForex – New wave of infections scares markets
Riskier currencies struggle as concerns about a new wave of coronavirus cases underpinned demand for them.
The dollar index was hardly changed at 97.09. The greenback has strengthened in recent weeks as investors grappled with fears that the COVID-19 pandemic’s impact on economic growth.
The Japanese yen was last trading neutral at 107 after touching a six-day high of 106.70. The safe-haven remained close to the one-month high of 106.58 it rose to last week.
The Australian dollar lost 0.3% to $0.6864, hit by worse than expected employment data.
Australia’s unemployment rate jumped to the highest in about two decades in May. Nearly a quarter of a million people lost their jobs due to the coronavirus pandemic-driven shutdowns.
The euro was little changed against the U.S. dollar at $1.1250. The common currency has lost nearly 1% of its value in less than a week. Investors challenge whether the European Union would be able to pass the ambitious stimulus plan.
Sterling dipped as investors’ focus turned to Bank of England meeting. Investors braced for a larger-than-expected increase in the BoE’s quantitative easing programme to combat the pandemic economic fallout.
The British pound was 0.2% lower against the dollar at $1.2530, and 0.3% lower to the euro at 89.80 pence.
In commodity markets, gold was stuck at $1,726.48 per ounce.
Oil prices recovered from losses earlier in the session. U.S. crude futures down 0.2% to $38.13 per barrel. International benchmark Brent added 0.2% to $40.78 a barrel.
The OPEC+ are expected to hold an online meeting later to discuss the future of a record 9.7 million barrels per day output cut.
PLEASE NOTE The information above is not investment advice.
Sources: Reuters, Investing, CNN money