U.S. Dollar Soared on Monday. How Did Other Currencies Fare?
The U.S. dollar surged forward on Monday, as rising Covid-19 cases in the United States and Europe made traders cautious. The lack of progress on a U.S. stimulus package hasn’t helped matters as well.
On Sunday, U.S. House Speaker Nancy Pelosi stated that she expected a White House response on Monday to the latest stimulus plan. However, there is little evidence that the deal will close.
Meanwhile, the U.S. has recorded its highest number of new coronavirus cases for two consecutive days, along with France. Italy has ordered bars and restaurants to shut by 6 p.m. while Spain announced a new state of emergency.
Media reported that the Oxford/AstraZeneca vaccine has proved successful in older people. According to news, the staff at a British hospital were warned to prepare for a vaccine as early as next month. However, that news failed to boost sentiment.
Hopes for a vaccine prevented markets collapsing on Monday – noted Stephen Innes, the Chief Global Market Strategist at broker Axi.
He stated that fortunately, there are several vaccines in the pipeline. In another case, there could have been a serious market reset this morning with coronavirus cases surging in every corner of the world this weekend.
How did major currencies trade?
The U.S. dollar climbed up by 0.2% at 92.95 against a basket of currencies. On the other hand, the euro/dollar, which is the most traded currency pair, tumbled down by 0.3% at 1.1831. The dollar also edged up by 0.1% against the Japanese yen at 104.87.
The biggest losers among major currencies were the Australian dollar and the Norwegian crown, which last week had hefty returns as investors took on more risk.
The Aussie dollar plummeted down by 0.3% at 0.7118 on Monday. The Norwegian crown dropped by 0.9% at 9.3015 against the dollar and by 0.7% at 11.0050 against the euro, after hitting a three-week low of 11.0190.
Norway is due to announce more restrictions this week to limit the spread of the Covid-19. The country reported a surge in infection cases during the last weeks. Meanwhile, traders are also waiting for the German IFO business survey. They expect improvement in current conditions.
The British pound also declined in early trading, tumbling down by 0.3% to $1.2995. However, it was stable against the euro at 91 pence.
The Chinese yuan dropped down by 0.4% against the U.S. dollar at 6.6907 as the Chinese authorities began discussing its next five-year plan.
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