Author: Peter Nurse
investing. com – The dollar rose on Monday. Increasing Covid-19 events posed a threat to the global economic recovery and directed them to safe harbors.
Measures the performance of the US dollar against a trade-laden basket of 6 major currencies. US dollar index, up 0.2% to 92,828.
EUR/USD dropped to 1.1803 points, trading just over 1.1772, the three-month low seen last week. USD/JPY down 0.1% to 109.97 GBP/USD traded at 1.3754, down 0.1%. AUD/USD fell 0.3% and was bought at 0.7382.
The greenback held firm as investor aversion to risk as rising event numbers threatened to halt the global economic recovery.
While many of the new incidents are seen in southeast Asia, the number of infections is also on the rise in Europe, although the US and UK have now lifted many of the societal restrictions.
The number of incidents in the USA increased by 70% compared to the previous week, and the number of deaths increased by 26%. According to Rochelle Walensky, Director of the US Centers for Disease Control and Prevention, outbreaks are more common in areas of the country with low vaccination rates.
According to Reuters information, the seven-day average in the number of new incidents per day is over half a million for the first time since May.
Another interesting development this week, European Central Bank’s (ECB) will have its meeting on Thursday. Last week, the bank’s strategic review was shared.
“The probability distribution is bearish for the EUR/USD pair next week,” ING analysts said. “The lack of change in the ECB’s stance does not seem to be enough to keep the euro rising. At the same time, a random change in the ECB to the pigeon interpretation of the strategic assessment will underline the recent bearish trend in the EUR/USD pair. ”
on the other hand USD/CNY
The pair rose 0.1% to 6.4822 ahead of the Chinese central bank’s meeting on Tuesday.
The People’s Bank of China has recently cut reserve requirement ratios for banks, sparking speculation about the prime interest rate.