Forex Today: Dollar wins on run to safety
|Here is what you need to know on Tuesday, September 22:
Risk-off took over the financial world. Equities plunged in Europe and the US and the greenback was the one and only winner across the FX board. The dollar’s demand eased ahead of Wall Street’s close, but the currency retains daily gains against most major rivals.
A second wave of coronavirus hitting Europe was the main reason behind the dismal mood. The number of daily cases in the most troubled countries is raising at levels last seen in April/May. Local lockdowns have been announced in different countries.
EUR/USD reached a fresh September low of 1.1731 further weighed by comments from German FinMin Scholz, who said this Monday that German debt will likely reach the 80% of the GDP, and subtle referred to EUR’s appreciation, as he added that the ECB is currently faced with a strengthening currency. Meanwhile, ECB’s Lagarde said that the Union’s economic recovery remains “very uncertain, uneven and incomplete.”
The GBP/USD pair fell to sub-1.2800 after the government’s chief medical officer, Chris Whitty, said that if the current trend in rising cases continues, the UK could expect to see almost 50,000 new cases per day in mid-October. As a result, PM Boris Johnson is reportedly considering a national two-week lockdown, to stop the outbreak. Worth noting that the UK has already announced new restrictions in north-east England which came in force last week.
Dollar’s demand hit commodities. Gold fell to $1,882 a troy ounce, ending the American session around 1,910. Crude oil prices also fell, with WTI ending the day below $40.00 a barrel.
Cryptocurrencies were also affected by the dollar’s strength with BTC/USD losing the 11,000 level.
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