U.S. Dollar Appreciates As Virus Infections Rise
September 25 2020 - 5:54AM
RTTF2
The U.S. dollar was higher against its major counterparts in the
European session on Friday, as new restrictions in Europe due to a
resurgence in Covid-19 cases dampened prospects of economic
recovery.
A second wave of infections across Europe forced governments to
reimpose drastic measures.
The U.K. reported the highest number of new coronavirus cases in
a single day since the start of the pandemic.
France also reported a record number of Covid-19 cases, a day
after the government announced new restrictions on bars and
restaurants in major cities.
Spain's cumulative tally of confirmed coronavirus infections
passed 700,000 on Thursday.
Investors focus on stimulus talks in Washington as the Democrats
are preparing a $2.2 trillion package amid indications of strain in
financial markets.
Data from the Commerce Department showed that durable goods
orders climbed much less than expected in the month of August.
The Commerce Department said durable goods orders rose by 0.4
percent in August after soaring by an upwardly revised 11.7 percent
in July.
The greenback recovered from a 3-day low of 1.2806 against the
pound and reached as high as 1.2694. The greenback may find
resistance around the 1.25 level.
Data from the Office for National Statistics showed that the UK
budget deficit widened to the highest on record in August due to
lower income and government's coronavirus relief schemes.
Public sector net borrowing excluding public sector banks,
increased by GBP 30.5 billion from last year to GBP 35.9 billion in
August.
The greenback rose back to 105.53 against the yen, heading to
pierce a 10-day peak of 105.54 hit at 8:45 pm ET. If the greenback
rallies again, it may find resistance around the 108.00 mark.
The USD/CHF pair hit 0.9286, its biggest level since July 23. On
the upside, 0.96 is seen as its next likely resistance level.
The greenback bounced off from its early low of 1.1685 against
the euro, with the pair trading at 1.1626. Next key resistance for
the greenback is seen around the 1.14 mark.
Data from the European Central Bank showed that Eurozone money
supply increased at a slower pace in August and credit to the
private sector logged a steady growth.
The broad monetary aggregate M3 expanded 9.5 percent on a yearly
basis, slower than the revised 10.1 percent increase seen in July.
M3 was expected to grow 10.2 percent.
The U.S. currency recovered to 1.3391 versus the loonie, 0.7025
against the aussie and 0.6541 against the kiwi, off its prior low
of 1.3328, 2-day lows of 0.7087 and 0.6592, respectively. The next
possible resistance for the greenback is seen around 1.37 versus
the loonie, 0.68 against the aussie and 0.63 against the kiwi.
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