Dollar higher amid new European lockdowns and restrictions
New lockdowns and social restrictions in Germany and France to stem the latest Covid-19 surge has investors scrambling for safety. The US dollar and global bonds are up across the board as European equity markets tumble. The US equity market “fear gauge”, the VIX Index, climbed to its highest level since June. Oil and gold, and other so-called “risky assets” are all lower.
October 28, 2020
EUR/USD 1.1735 GBP/USD 1.2960 USD/CAD 1.3281 AUD/USD 0.7065 USD/JPY 104.3400 USD/CNH 6.7288 USD/ILS 3.3947 USD/MXN 21.2445 USD/CHF 0.9109 USD/INR 73.8763
The dollar is up across the board as a safe haven asset in light of newly announced lockdowns and restrictions in Europe. The dollar index is up nearly 0.75% to its highest level in two weeks. US futures are opening lower despite upbeat earnings reported by two bellwether companies, General Electric and Boeing. Analysts are revisiting the possibility of a contested US presidential election.GBP
The UK pound is lower overnight by 0.75% and below $1.30 for the first time in two weeks on risk-off selling. Intense Brexit negotiations continue, as both sides are now driven to complete a deal by mid-November.EUR
The euro fell by more 0.50% and the German DAX equity index dropped 4% after German Chancellor Angela Merkel announced a proposal to close bars and restaurants for a month to stem the rise in Covid-19 infections. French President Macron is expected to impose a month-long national lockdown.CAD
The Canadian dollar is lower by 0.75%, as traders rush to the safety of the US dollar. Lower oil and other commodity prices are helping push the loonie lower as well. Traders await today's Bank of Canada announcement, no change is expected.ASIA/PACIFIC
The Japanese yen gained overnight as a safe haven currency, trading at the lower end of its 104-105 trading range.
China announced they will be changing the formula for the daily USD/CNY fixing, which may lead to more volatility in the currency pair. The details of the adjustment have not been provided at this time. The CNY is slighter weaker overnight.
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