Dollar Up, Hopes of Fed Monetary Stimulus Rise
The dollar was up on Thursday morning in Asia, clawing back gains from earlier losses. The market saw small moves as the number of COVID-19 cases globally continues to rise incessantly, and expectations of further monetary stimulus from the U.S. Federal Reserve begin to grow.
“Central bankers continue to offer promises of almost endlessly easy money. That, when U.S. COVID-19 infection rates are causing enough concern about growth prospects to offset vaccine news, has kept the dollar on the backfoot, even as equities soften, Societe Generale (OTC:SCGLY) currency strategist Kit Juckes told Reuters.
The U.S. Dollar Index Futures that tracks the greenback against a basket of other currencies inched up 0.09% to 92.472 by 10:07 PM ET (2:07 AM GMT). It has been on a downward trend in general, despite stocks also slipping, as the recently released industrial production and retail sales data highlighted the fragility of the U.S. economic recovery.
The USD/JPY pair inched down 0.01% to 103.81.
The AUD/USD pair edged down 0.14% to 0.7295. The AUD saw a slight lag as South Australia imposed a lockdown to curb a fresh COVID-19 outbreak in the state, which overshadowed positive labor data released earlier in the day. The country’s employment change grew by 178,800 in October, beating the expected 30,000 contraction and the 29,500 contraction in September. The unemployment rate for the month was 7%, also beating the forecast 7.2% reading.
Across the Tasman Sea, the NZD/USD pair was down 0.25% to 0.6907.
The USD/CNY pair edged up 0.11% to 6.5659, with the yuan near a 29-month high in offshore trade.
The GBP/USD pair was down 0.22% to 1.3239. The pound had been boosted by hopes of the U.K. and the European Union reaching a post-Brexit trade deal ahead of the end-of-year deadline.
COVID-19 continues its global rampage, and the increasing number of global cases continues to concern investors. The U.S. remains in a “severe recession” and growth is vulnerable to swings in infection rates, New York Federal Reserve President John Williams (NYSE:WMB) warned on Wednesday. Williams also reiterated that the central bank would use all its tools to help in the economic recovery.
New York City, the country’s largest public school district, said that it would suspend in-person teaching from Thursday to curb the spread of COVID-19 in the state. The number of U.S. deaths surpassed 250,000 as of Nov. 19, according to Johns Hopkins University data.
Investors will also look to U.S. jobless claims data, due later in the day, which is expected to dictate the Fed’s next steps. Across the Atlantic, European Central Bank President Christine Lagarde will attend a European Parliament Committee hearing in Frankfurt later in the day.
Reference by: investing.com
Nov 19, 2020
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