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Pandemic Recovery Stagnates, USD Up

October 16 - October 31

The yen rose and the dollar headed for its best week of the month on Friday as soaring cases coronavirus and progress towards the impasse US recovery had investors seeking safe assets.

Pandemic

As fighting fresh curbs Covid-19 was introduced in Europe and Great Britain, the reserve currency of the world has reached a two-week high of 93.910 against a basket of currencies = USD. He kept just below the summit of the session in Asia.

The yen JPY = refuge return crept to a two-week high, hit it on Wednesday and last traded at 105.24 per dollar. The Australian dollar fell 0.3% and other majors nursed losses.

London between tighter lockdown Covid-19 from midnight, which, with a curfew in Paris leaves two of the largest cities of Europe living under restrictions imposed by the state.

Stimulus

Registration is also fighting against US Midwest surge in new cases as data shows US recovery and slowing the recovery plans bogged down in a three-way negotiations between the White House, Senate Republicans and Democrats bedroom.

“The markets fear a slowdown that new cases of viruses increase,” analysts at ANZ bank Susan Kilsby and David Croy in a note.

“The deterioration is evident all over Europe, which is a major blow to the momentum of the recovery and increases the risks of deflation. ”

Aussie bearish Yuan Bullish

Risk sensitive currencies have been the hardest hit, with the Australian dollar AUD =, kiwi NZD = and NOK Norwegian Krone = leading weekly fall. The Norwegian krone NOK = nursing a loss of 2.5% this week, while the Australian dollar is down 2.3%.

Sterling GBP = was also sold strongly on Thursday on concerns about the maintenance of barriers to the European Union and Britain to reach a commercial agreement Brexit. It lost 1.1% this week and maintained at $ 1.2893 on Friday.

The EU has put the burden on Britain to compromise or are willing to trade disruptions in less than 80 days. British Prime Minister Boris Johnson and respond to its approach to talks on Friday.

The euro EUR = was flat in Asia on Friday but lost about 1% for the week. The US dollar was also stable and gained 0.8% against a basket of currencies this week, its biggest weekly gain since late September.

Asian standout movers for the week were the Australian dollar and the yuan.

The Aussie fell to the bottom of a range that has held for several months after investors considered the comments of the Governor Reserve Bank of Australia indicating rate cuts and buying bonds that options policies, raising the possibility of monetary easing.

“The feedback feeling Jackson Hole about them,” Westpac economist Bill Evans said in a note, referring to the speech of August the US Federal Reserve Chairman Jerome Powell outlining a new approach and more accommodating to inflation.

“The conclusion of the two speeches is that we can expect the policy remain stimulative even longer,” said Evans.

The yuan, meanwhile, has stood down after a nudge of the People’s Bank of China. Last weekend, the central bank reduced the cost of shorting the currency and was edging slowly earth trading band slightly lower.

However, supported by strong bonds and paris market entries on a presidency Biden ushering in Sino-Americans more stable relationships., The yuan CNY = fell by only 0.4% in a week where the dollar has made a jump.

A 6.7139 per dollar in onshore trading, it is only a fraction shy of the top of 17 months he was there a week ago.

“The yuan has entered a massive bullish channel and USDCNH is a tendency to decrease max,” said Stephen Innes, strategist at brokerage Axi.

 

 

Details

Start:
October 16
End:
October 31
Event Category: