January 27, 2023

Sentiment bounces back and forth as pandemic intensifies

LQDFX Forex news Blog | Sentiment bounces back and forth as pandemic intensifies

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Investors’ sentiment bounces back and forth as U.S. coronavirus infections surged and they weighed the timeline of the roll-out of an effective vaccine.

New York became the latest state to introduce social distancing restrictions on Wednesday. Νew coronavirus cases in the United States surged above 100,000 for an eighth consecutive day hitting world records.

Meanwhile, a Labor Department report showed U.S. jobless claims fell to a seven-month low last week.

Europe is grappling with surging infections and new COVID-19 restrictions. Germany’s economic advisers trimmed next year’s growth outlook.

Along with the virus, U.S. President Donald Trump’s refusal to concede defeat to Democrat Joe Biden in last week’s election is also beginning to jangle investors’ nerves.

A EU-UK trade pact is unlikely to come together this week and negotiations might go into the next. This further delay raised the prospect that no trade deal may be reached before Brexit transition arrangements end on Dec. 31.

Britain’s economy grew by a slower than expected 1.1% in September from August. This is a pace that leaves the country lagging other rich nations in its attempted recovery from the pandemic.

British finance minister Sunak said steps taken to restrict the spread of COVID-19 had likely slowed economic growth since September.

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Forex – Sentiment bounces back and forth as pandemic intensifies

The post-U.S. election and coronavirus vaccine bull run paused. Larger moves were held in check as investors await speeches from Federal Reserve Chair, European Central Bank President and Bank of England Governor at a central banking forum on Thursday.

The dollar dipped on Thursday as investors appeared to waver between optimism and caution.

The dollar index was down 0.15% by midday in London. The moves in the past week have for now put the brakes on a long drop for the dollar. The index had shed about 10% between March and the announcement of progress on Pfizer’s COVID-19 vaccine on Monday.

The risk-sensitive Australian and New Zealand dollars made up some ground, last trading only about 0.1% lower.

The New Zealand dollar soared for a second session to a 19-month high. The kiwi rose to $0.6915 making a fresh 20-month high versus the U.S. dollar. Traders became less convinced that negative rates are a sure thing for New Zealand.

After an initial fall, the euro bumped higher by 0.3% to $1.1823. The common currency was near $1.18, in the middle of the $1.16-$1.20 range it’s been in since late July.

The Sterling last traded down 0.5% amid more Brexit uncertainty and as data showed the UK economy losing speed again.

Global oil benchmark Brent snapped three consecutive days of gains to dip to $43.46 a barrel. However, it remained near a two-month high.

Safe-haven gold edged up. Spot gold rose 0.4% to $1,872 per ounce, while U.S. gold futures were 0.3% higher.

PLEASE NOTE The information above is not investment advice.

Sources: Reuters, Investing, CNN money