Safe-haven currencies, like the US dollar and the Japanese yen, jumped today as risk aversion was ruling markets. The main themes were the rising number of coronavirus cases in Europe and the upcoming presidential election in the United States.
According to reports, the French government is considering a month-long nationwide lockdown to curb the rising number of coronavirus cases. French President Emmanuel Macron will address the issue on television later today. The European Commission announced that it “is launching an additional set of actions to help limit the spread of the coronavirus, save lives and strengthen the internal market’s resilience”. President of the EC Ursula von der Leyen called for the European Union members to “work closely together”. Germanyâs DIW institute stated that the second wave of the COVID-19 pandemic “has arrived” and warned that it “threatens to stifle the economy upswing”.
Meanwhile, hopes for fiscal stimulus from the US government before the presidential election wane. US President Donald Trump said:
After the election we’ll get the best stimulus package you’ve ever seen.
Uncertainty about the outcome of the election is also on the minds of market participants, discouraging them from risk. On top of that, there is a significant probability that whatever the outcome the losing side will try to contest it in the court.
EUR/USD dropped from 1.1787 to 1.1736 as of 13:01 GMT today. USD/CAD surged from 1.3185 to 1.3292. USD/JPY went down from 104.46 to 104.30, touching the low of 104.11 intraday.
If you have any questions, comments, or opinions regarding the US Dollar, feel free to post them using the commentary form below.
