The US dollar headed for a second day of gains as virus woes increase demand for safe assets
Yesterday, a surge in virus cases in a handful of US states led the financial markets to take profits and move into secure assets like the US dollar. The sentiment continued this morning although strong Durable Goods orders in the US tempered the risk-off sentiment somewhat.
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June 25, 2020
EUR/USD 1.1209 GBP/USD 1.2402 USD/CAD 1.3638 AUD/USD 0.6876 USD/JPY 107.2900 USD/CNH 7.0855 USD/ILS 3.4387 USD/MXN 22.8606 USD/CHF 0.9497 USD/INR 75.6663
The US dollar is stronger again today after virus cases sprang up in different regions of the US leading financial markets to safe haven assets. Durable Goods orders for May came in at +15.8% after a 18% drop in April. The traditionally volatile index was somewhat upstaged by weekly jobless claims elevated at 1.5M vs. the 1.3M expected. With a surge in virus cases, any historic data immediately looks obsolete.GBP
The pound was steady vs. the US dollar as FX markets wrestled with optimism around trade negotiations with the EU and pessimism regarding continued virus concerns.EUR
The euro is weaker on overall risk aversion. The issue of a German court ruling against the European Central Banks quantitative easing seems to have found a solution according to a ECB official.CAD
The Canadian dollar weakened on overall US dollar strength and concerns that the resurgence in Covid cases will hurt the price of oil. West Texas Intermediate headed for a second day of significant price declines after inventories rose and the outlook for demand weakened.
Yesterday afternoon, Fitch credit rating agency downgraded Canada’s sovereign debt.ASIA/PACIFIC
Australia reported the biggest one-day spike in Covid-19 cases in two months.
The Indian rupee is holding steady at the 75 to a dollar level. Some market participants see the reduced growth forecasts for the Indian economy pushing the FX rate closer to 80.
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