The Dollar strengthens with the increase of cases of Coronavirus

By Peter Nurse

The dollar has slightly strengthened at the beginning of the european session on Wednesday, the safe-haven currency, being highly requested as an outbreak of the coronavirus in the United States casts doubt on the strength of the economic rebound.

At 11: 25 am, the dollar index, which tracks the greenback against a basket of six other currencies, rose 0.1% to 96,873.

The EUR/USD rose 0.2% to 1,1280, while the USD/JPY remained stable at 107,52.

There are approximately 11.8 million cases Covid-19 in the world in the date of 8 July, according to data from the Johns Hopkins University, of which the United States has the largest known number of cases and deaths in the world.

A number of officials of the federal Reserve expressed Tuesday their concern about the negative impact that could have the upsurge of the infections on the economy at a time when some stimulus programs are about to expire.

The president of the Atlanta Fed, Raphael Bostic, has warned that the increase in the number of cases has made the business owners “nervous” and that “we really have the feeling that this might last longer than expected.”

The increase in the number of cases is not only the case of the United States. The AUD/USD pair lost 0.2% to 0,6935, and the australian dollar weakened after the country’s second city, Melbourne, has reimposed the containment measures to stem the epidemic.

The GBP/USD gained 0.2% to 1,2559 after Prime minister Boris Johnson has said that the United Kingdom remains committed to working hard to find a trade agreement with the EU. The Chancellor of the Exchequer Rishi Sunak must announce the details of the latest fiscal stimulus plan in the country next Wednesday.

The pound sterling has gained about 0.6% this week against the dollar and 0.4% against the euro, but remains one of the currencies the lowest in the G7, because of doubts as to the signing of a trade agreement by the end of the year.

There is a certain skepticism about the realization of a proposal by some advisers to Donald Trump to undermine the currency peg of Hong Kong, because such a measure would be difficult to implement and could adversely affect american interests as much as to punish China.

Like this post? Please share to your friends:
Leave a Reply