Global covid concerns push dollar higher
Tuesday 22 September, 2020
Daily Currency UpdateUSD - United States DollarThe US dollar strengthened for the third day in a row, and the US Dollar Index reached a two-week high this morning.Mounting concerns for more Covid-19 lockdowns pushed the dollar higher. In the US, cumulative deaths approached 200,000. In the UK, the British anticipated 50,000 new cases a day by mid-October. And across parts of Europe, many expected new lockdowns.The S&P 500 fell 1.2% and oil prices dropped yesterday. As we’ve seen, the US dollar rose as the equity markets fell.Today, Federal Reserve Chairman Jerome Powell and US Treasury Secretary Steven Mnuchin will appear before the House Financial Services Committee. They are expected to discuss their agencies’ response to the coronavirus.
Key MoversThe euro was weighed down by negative comments from the European Central Bank President Christine Lagarde. She said that the economic recovery remains very uncertain, uneven and incomplete. Lagarde reiterated that the ECB stands ready to amend all its instruments as appropriate and the increased exchange rate put prices under downside pressure.Difficulties in the banking sector caused unease for investors risk appetite. Yesterday a report was released stating that some UK banks had moved illicit funds over the past two decades. The Great British pound reached a one-week low on MondayThe Australian dollar followed equities and risk assets lower as investors sought the safety of bonds and haven currencies amid growing uncertainty and a rise in Covid-19 infections. A spike in cases across Europe has prompted calls for renewed lockdown measures with France, the UK and Spain all introducing targeted social distancing protocols. Attentions today turn to RBA deputy Guy Debelle as he addresses key industry groups. Investors will be keenly attuned to any hint a change in monetary policy may be forthcoming.
- EUR/USD: 1.170 - 1.177 ▲
- GBP/USD: 1.271 - 1.285 ▲
- AUD/USD: 0.716 - 0.723 ▲
- USD/CAD: 1.329 - 1.334 ▼