Risk currencies breathe after rally, virus resurgence buoys dollar
Risk currencies such as the Australian dollar took a breather from recent gains on Tuesday, with investors hitting pause on an China-led equity market rally, as new coronavirus flare-ups and local lockdowns in some countries lifted the safe-haven dollar.
Riskier currencies such as the commodity-driven Aussie, Norwegian crown, the New Zealand dollar and the Swedish crown have rallied strongly since April alongside increased risk appetite in global markets.
But with a blazing run-up led by Chinese equities cooling in other stock markets on Tuesday, surging coronavirus infections in places that are attempting a reopening, and regional lockdowns still being introduced, investors appeared to take their foot off the gas.
Lockdown measures were reimposed in Australia’s second biggest city on Tuesday, confining Melbourne residents to their homes unless undertaking essential business for six weeks, as officials scramble to contain a coronavirus outbreak.
The Australian dollar sank 0.65% to its U.S. counterpart after the announcement, last trading at $0.6928. AUD=D3
It had no reaction to the country’s central bank leaving rates unchanged.
The dollar index, meanwhile, rose 0.3% to 97.009. =USD It gained 0.3% against the Japanese yen, to trade at 107.71 JPY=.
The index, which measures the greenback against a basket of currencies, breached a key technical indicator this week. Known as a death cross, the chart formation occurs when a measure’s long-term 200-day moving average has fallen below its short-term 50-day moving average. It last occurred for the dollar index in December 2019, following which it shed more than 3%. (Graphic: Dollar death cross, here)
Florida’s greater Miami area became the latest hotspot to roll back its reopening as virus cases surged nationwide by the tens of thousands and the U.S. death toll topped 130,000.
“After yesterday’s strong risk rally – which also drove risky currencies higher – the reality of regional lockdowns in places like the U.S., UK, Spain and now Australia are a gentle reminder that the threat of a second coronavirus wave is one that investors should not be quick to price out,” said Viraj Patel, global FX and macro strategist at Arkera.
Investors are watching nervously as infections surge in the United States and India, but are so far taking the view that more massive lockdowns are unlikely.
On Tuesday, the kiwi fell 0.4% to $0.6530 having, like the Aussie, pulled back from testing the top of a range it has kept for about a month. [AUD/]
The euro EUR= sat just below a two-week high touched on Monday at $1.1275 and the pound GBP= held steady at $1.2491.
A key measure of the market’s long-term inflation expectations in the euro area EUIL5YF5Y=R has risen from record lows hit in March and is close to its highest levels in around 4 months.
“One implication of higher inflation expectations is a further push higher in euro/dollar. The pair made it back above $1.13 yesterday and we think it has further to go in the short term,” said strategists at Danske Bank in a note to clients, adding that they saw the euro reaching $1.15 in 3 months.
CHINA BULL RUN
The Chinese yuan CNH=EBS picked up where it left off after soaring with runaway Chinese equities on Monday, but pulled back from an offshore top of 6.9965 per dollar as caution crept in.
If the Chinese stock run extends in the coming days – and barring major swings in global risk sentiment – investors will get the chance to assess the PBOC’s tolerance for a stronger yuan,” ING strategists wrote in a note to clients.
“It is also worth mentioning that the U.S. Treasury FX report is still to be published and…we cannot exclude that China can be labelled a manipulator again if tensions with the U.S. flare up again (the PBOC allowing USD/CNY to move above 7.00 was the trigger for the ‘manipulator’ designation last year).”
Source: Reuters
Comments (81)
… [Trackback]
[…] Info to that Topic: dayfinanceltd.com/risk-currencies-breathe-after-rally-virus-resurgence-buoys-dollar/ […]
… [Trackback]
[…] Read More Information here on that Topic: dayfinanceltd.com/risk-currencies-breathe-after-rally-virus-resurgence-buoys-dollar/ […]
… [Trackback]
[…] Information on that Topic: dayfinanceltd.com/risk-currencies-breathe-after-rally-virus-resurgence-buoys-dollar/ […]
… [Trackback]
[…] Info on that Topic: dayfinanceltd.com/risk-currencies-breathe-after-rally-virus-resurgence-buoys-dollar/ […]
… [Trackback]
[…] Find More here on that Topic: dayfinanceltd.com/risk-currencies-breathe-after-rally-virus-resurgence-buoys-dollar/ […]
… [Trackback]
[…] Information on that Topic: dayfinanceltd.com/risk-currencies-breathe-after-rally-virus-resurgence-buoys-dollar/ […]
… [Trackback]
[…] Here you can find 94726 additional Information to that Topic: dayfinanceltd.com/risk-currencies-breathe-after-rally-virus-resurgence-buoys-dollar/ […]
… [Trackback]
[…] Find More Info here to that Topic: dayfinanceltd.com/risk-currencies-breathe-after-rally-virus-resurgence-buoys-dollar/ […]
… [Trackback]
[…] Information to that Topic: dayfinanceltd.com/risk-currencies-breathe-after-rally-virus-resurgence-buoys-dollar/ […]
… [Trackback]
[…] Find More Information here on that Topic: dayfinanceltd.com/risk-currencies-breathe-after-rally-virus-resurgence-buoys-dollar/ […]
… [Trackback]
[…] There you can find 8986 additional Information on that Topic: dayfinanceltd.com/risk-currencies-breathe-after-rally-virus-resurgence-buoys-dollar/ […]
… [Trackback]
[…] Info to that Topic: dayfinanceltd.com/risk-currencies-breathe-after-rally-virus-resurgence-buoys-dollar/ […]
… [Trackback]
[…] Information on that Topic: dayfinanceltd.com/risk-currencies-breathe-after-rally-virus-resurgence-buoys-dollar/ […]
… [Trackback]
[…] Find More here on that Topic: dayfinanceltd.com/risk-currencies-breathe-after-rally-virus-resurgence-buoys-dollar/ […]
… [Trackback]
[…] Read More here on that Topic: dayfinanceltd.com/risk-currencies-breathe-after-rally-virus-resurgence-buoys-dollar/ […]
… [Trackback]
[…] Find More on that Topic: dayfinanceltd.com/risk-currencies-breathe-after-rally-virus-resurgence-buoys-dollar/ […]
… [Trackback]
[…] Find More to that Topic: dayfinanceltd.com/risk-currencies-breathe-after-rally-virus-resurgence-buoys-dollar/ […]
… [Trackback]
[…] Read More to that Topic: dayfinanceltd.com/risk-currencies-breathe-after-rally-virus-resurgence-buoys-dollar/ […]
… [Trackback]
[…] Find More on on that Topic: dayfinanceltd.com/risk-currencies-breathe-after-rally-virus-resurgence-buoys-dollar/ […]
… [Trackback]
[…] Read More here on that Topic: dayfinanceltd.com/risk-currencies-breathe-after-rally-virus-resurgence-buoys-dollar/ […]
I’d like to thank you for the efforts you have put in writing this
website. I’m hoping to see the same high-grade blog posts from you in the future as well.
In fact, your creative writing abilities has motivated me to get my own blog now 😉
Thank you, I’ve just been looking for info approximately this
topic for a long time and yours is the best I have found out till now.
However, what concerning the conclusion? Are you certain concerning the
source?
… [Trackback]
[…] Read More Information here on that Topic: dayfinanceltd.com/risk-currencies-breathe-after-rally-virus-resurgence-buoys-dollar/ […]
… [Trackback]
[…] Read More Information here on that Topic: dayfinanceltd.com/risk-currencies-breathe-after-rally-virus-resurgence-buoys-dollar/ […]
… [Trackback]
[…] Read More on that Topic: dayfinanceltd.com/risk-currencies-breathe-after-rally-virus-resurgence-buoys-dollar/ […]
Great post.Thanks Again. Will read on…
I really liked your article.Thanks Again. Fantastic.
Hello, its good piece of writing regarding media print, we all know media is a enormous source of facts. Rozelle Felix Verile
Wow! This can be one particular of the most useful blogs We’ve ever arrive across on this subject. Basically Great. I’m also an expert in this topic so I can understand your effort.
1 ivermectin dosage for dogs ivermectin tractor supply dogs
Hey! I just wanted to ask if you ever have any problems with hackers? My last blog (wordpress) was hacked and I ended up losing several weeks of hard work due to no backup. Do you have any methods to stop hackers?
Very informative post.Thanks Again. Much obliged.
Thanks a lot for the post.Really thank you! Cool.
Im grateful for the article post. Much obliged.
Major thanks for the blog article.Really thank you! Will read on…
Thanks for the blog post.Really looking forward to read more. Keep writing.
I cannot thank you enough for the article post.Really thank you! Fantastic.
Great, thanks for sharing this post.Really thank you! Will read on…
I appreciate you sharing this blog post.Really thank you! Really Cool.
Appreciate you sharing, great post.Really thank you! Great.
I really liked your blog post. Fantastic.
Great article post.Thanks Again. Awesome.
Thank you for your article post.Thanks Again. Want more.
Really appreciate you sharing this blog post. Keep writing.
This is one awesome blog post.Thanks Again. Great.
I am so grateful for your blog article.Really thank you! Fantastic.
Hello there! Do you use Twitter? I’d like to followyou if that would be okay. I’m undoubtedly enjoying your blogand look forward to new posts.Feel free to visit my blog post 100liba.com
Good day! Would you mind if I share your blog with my facebook group?There’s a lot of people that I think would reallyappreciate your content. Please let me know. Thanks
I am so grateful for your blog.Really thank you! Keep writing.
omeprazole weight loss how long does omeprazole stay in your system
Some really excellent info , Gladiola I found this. “Reprove thy friend privately commend him publicly.” by Solon.
Major thankies for the post.Really thank you! Cool.
Very interesting topic, thanks for posting.Here is my blog – 163.30.42.16
Awesome blog.Thanks Again. Great.
Thanks again for the blog article.Really thank you! Want more.
Major thanks for the blog article. Really Great.
A round of applause for your article.Really thank you! Really Great.
I value the post.Really looking forward to read more. Really Cool.
Very good blog post.Really thank you! Really Great.
“I couldn’t resist commenting. Very well written!”
I take pleasure in, result in I found just what I used to be having a look for.You’ve ended my four day long hunt! God Bless you man. Have a nice day.Bye
I loved your blog post.Thanks Again. Will read on…
Thanks for the article.Really looking forward to read more. Will read on…
I value the blog article.Really thank you! Great.
Thanks for the article post. Keep writing.
Wonderful blog! I found it while searching on Yahoo News. Do you have any suggestions on how to get listed in Yahoo News? I’ve been trying for a while but I never seem to get there! Many thanks
best essay writers online – edubibliography.com term papers for sale
of course like your web-site but you have to check the spelling on several of your posts.
Several of them are rife with spelling problems and I
in finding it very troublesome to tell the
truth then again I’ll surely come back again.
Thanks for the blog post.Much thanks again. Really Great.
Thanks for the article post.Really thank you! Will read on…
Very neat article.Much thanks again. Really Great.
Really appreciate you sharing this post.Much thanks again. Cool.
Enjoyed every bit of your post.Much thanks again. Great.
Great article post.Really thank you! Will read on…
Thanks so much for the blog.Thanks Again. Keep writing.
metformin recall interactions for metformin metformin cancer
Great, thanks for sharing this blog article.Much thanks again. Much obliged.
I really like and appreciate your blog post.Much thanks again. Awesome.
Major thankies for the blog.Really looking forward to read more. Really Cool.
Hey, thanks for the blog post.Really looking forward to read more. Want more.
Thanks for the post. Really Cool.