Dollar falls, Kiwi left behind as riskier currencies gain - GulfToday

Dollar falls, Kiwi left behind as riskier currencies gain


Picture used for illustrative purpose. File

The dollar fell in early London trading on Monday, riskier currencies gained and European markets opened higher, with some analysts attributing the pick up in sentiment to US regulators approving a treatment for COVID-19 patients.

More than 800,000 people around the world have died from the coronavirus, with the death toll in the United States alone surpassing 170,000. On Sunday the country granted "emergency use authorization" for treatment using the blood plasma of patients who have recovered from the disease.

Asian shares strengthened overnight and European indexes opened higher. Riskier currencies such as the Norwegian crown and the British pound also rose versus the dollar.

The dollar was little changed overnight but fell as markets opened in Europe, down around 0.1% at 93.105 by 0704 GMT.

However, Marshall Gittler, head of investment research at BDSwiss Group, warned clients to beware a false "risk-on" mood and questioned whether the authorisation represented a real treatment breakthrough or was timed to boost President Donald Trump on the eve of the Republican National Convention.

The Australian dollar was up 0.3% versus the greenback at 0.71785, little affected by the country's treasury saying that effective unemployment will climb above 13%. 


France sticks to forecast of 11% economic contraction, says Le Maire

Output and fresh businesses rise at quicker rates in the UAE

Gold slips as coronavirus treatment hopes boost risk appetite

The euro was up around 0.1% versus the dollar, at $1.18075 . Last week, the dollar outperformed the euro for the first time since mid-June, as U.S. business activity improved while European business surveys showed the economic recovery faltering.

In France, the health minister on Saturday ruled out a total lockdown but said localised measures could be taken. The country posted a new record high in daily post-lockdown infections on Sunday.

Italy also said it was not considering a new lockdown despite a rising number of infections.

Lee Hardman, currency analyst at MUFG said that the new growth in COVID-19 infections "threatens to undermine the current elevated level of bullish euro sentiment and positioning."

New Zealand Prime Minister Jacinda Ardern on Monday extended a coronavirus lockdown in Auckland, the country's largest city, until the end of the week and introduced mandatory mask wearing on public transport across the nation.

The Kiwi dollar did not strengthen along with other risk currencies, but was down 0.1% against the dollar, at 0.6532 .

"The inevitable economic backlash is likely fuelling speculation that the RBNZ (Reserve Bank of New Zealand) will step in with more cuts soon, something which has been a key driver of NZD recent underperformance," ING strategists wrote to clients.

They noted the market is also grappling with geopolitical concerns, with the protests in Belarus posing the risk of direct intervention by Russia.

Elsewhere, China's foreign ministry said it would file a lawsuit against the Trump administration over its ban on Bytedance, the Chinese owners of messaging app WeChat and video-sharing app TikTok.


Related articles