Virus Scare Puts Dollar Near Year’s Highs as ECB Looms

“The implication is the ECB’s monetary policy will now remain ultra easy for even longer which is a headwind to the euro,” said Commonwealth Bank of Australia strategist Kim Mundy.

Other majors likewise faced difficulty escaping multi-month lows leaving sterling, the Canadian, Australia and New Zealand dollars to trade under pressure in the Asia session.

“The U.S. dollar does seem to have quite an undertow of support,” said Westpac analyst Sean Callow in Sydney.

The dollar index added 0.1% to 93.033 and could test its March peak of 93.439, Callow said, as the currency seemed to find help from risk aversion when investors were nervous and support from rate hike expectations when they were not.

“The general mood on the dollar looks as though it would take a lot to derail the basic narrative of the dollar being in fairly good shape from here to the Jackson Hole conference,” he added, referring to the August symposium in Wyoming where the Federal Reserve may announce tapering of its bond purchases.

“For the time being you’d probably just prefer to keep long dollars for the next few weeks.”

Elsewhere the Australian dollar took a knock from soft retail sales data and the expectation of more weakness in the near term as much of the country is locked down to slow coronavirus transmission. It was off 0.3% at $0.7310.

The New Zealand dollar was parked at $0.6913 and the Canadian dollar began to hand back some of the bounce it managed overnight.

The dollar was steady against the safe-haven yen, which has also been advancing broadly while concerns grow about surging global coronavirus infections and the obstacle they could present to economies on the path to pandemic recovery.

The yen was last at 109.87 per dollar and 129.37 per euro.

The seven-day average of daily new infections is at its highest since May and the corresponding average of reported deaths is also on the rise.

Sterling faces pressure as cases soar while England drops most social curbs.

Sterling was last at $1.3616, below its 20-day and 200-day moving averages and just a fraction over Tuesday’s five-month low. The Singapore dollar also traded near Tuesday’s eight-month low after the reimposition of some curbs.

With a light data calendar on Wednesday, Thursday’s ECB meeting looms largest on the horizon. A dovish tone is expected after President Christine Lagarde foreshadowed a guidance tweak during an interview last week.

The ECB announced a new strategy which allows the bank to tolerate inflation above its 2% target and Lagarde said policy guidance would be revisited to demonstrate the bank’s commitment to the new goal.

“No change in the ECB bias is unlikely to be enough to send the euro higher,” analysts at ING said in a note. “At the same time, any ECB shift towards the dovish interpretation of the strategic review would underscore the recent downward euro/dollar trend.”

In the digital space, cryptocurrencies clawed back Tuesday’s losses to drag bitcoin from a one-month low and back over $30,000.

(Reporting by Tom Westbrook; Editing by Ana Nicolaci da Costa & Shri Navaratnam)

Source link

0 0 votes
Article Rating

Notifier de
0 Commentaires
Commentaires en ligne
Afficher tous les commentaires
Reset Password

Avertissement sur les risques :

Le trading peut vous exposer à des risques de pertes supérieures aux dépôts et ne convient qu’à une clientèle avisée ayant les moyens financiers de supporter un tel risque. Les CFD sont des instruments complexes et présentent un risque élevé de perte rapide en capital en raison de l’effet de levier. Entre 74 et 89% des comptes de clients de détail perdent de l’argent lors de la négociation de CFD. Vous devez vous assurer que vous comprenez comment les CFD fonctionnent et que vous pouvez vous permettre de prendre le risque élevé de perdre votre argent. Ce site n’est en aucun cas une offre de conseil en investissement ni une incitation quelconque à acheter ou vendre des instruments financiers. Trader le Forex et/ou les CFD’s implique un niveau de risque élevé, et peut ne pas être approprié car vous pouvez subir des pertes supérieures à votre dépôt. L’effet de levier peut être en votre défaveur.

Vous devez être conscient et avoir une compréhension complète de tous les risques associés au marché et au trading. Le site peut être amené à produire des commentaires d’ordre général, ce qui ne constitue pas des conseils en investissement et ne doit pas être interprété comme tel.

Veuillez recourir aux conseils d’un conseiller financier extérieur. Le site décline toute responsabilité pour les erreurs, inexactitudes ou omissions et ne garantit pas l’exactitude ou le caractère complet des informations, textes, graphiques, liens ou autres éléments contenus dans cette documentation. Toute information et toute mise à disposition sur le site ont un caractère privé.