By Peter Nurse
The u.s. dollar was sold aggressively in the beginning of the day on Monday, the operators and away from the shelters, as more and more countries announced a gradual lifting of restrictions on their ability Covid-19.
Has 10h35, the us dollar index, which tracks the greenback against a basket of six other currencies, was $ 99,990, falling 0.4%. GBP/USD rose 0.5% to 1,2424, while EUR/USD gained 0.2% to 1,0846. The dollars of australia, new zealand and canada have also increased, as the ruble and the rand.
In the course of the weekend, the global figures concerning the virus have continued to paint a picture broadly encouraging, with a number of new infections, deaths and hospitalizations decreased, and the most affected countries, such as Italy and Spain, which paved the way for the re-opening of their economies.
The positive tone has been reinforced by the adoption, last Monday, of new stimulus measures from the Bank of Japan, which has opened the opportunity to buy japanese government bonds without limit, while relating to 20, 000 billion yen the ceiling for corporate bonds and commercial paper.
At 10h35, USD/JPY traded down 0.2% to 107,26.
In the case of Europe, the most affected country, Italy, has given more details on its plans to increase the flexibility of the containment country on 4 may. In the economic power of the region, Germany, the largest carmaker in the world by sales, Volkswagen (DE:VOWG_p), resumed Monday the work at its headquarters in Wolfsburg.
In the United Kingdom, Prime minister Boris Johnson returns to work after her fight against the virus and should discuss plans to change – but not remove – the locking, may be before the deadline of 7 may, the date to which the government is legally obliged to announce its next revision of the rules.
Investors flocked to the dollar in recent weeks, in a context of economic turmoil continuous due to the pandemic of Covid-19, which resulted in capital inflows and a shortage of dollars.
“The recovery is noticeable in global equities during the month of April so far gives a glimpse of the possible effects of rebalancing, significant dollars,” said the analysts of the Danske Bank, in a research note. “These effects are expected to be negative in USD this time, as investors rebalance the hedges on the assets in the USD towards the end of the month”.
Investors will be attentive to the federal Reserve meeting which ends on Wednesday and the meeting of the european central Bank on Thursday.