Dollar slips amid risk-on mood

The US dollar lost ground against its major rivals in Tuesday trading, as glimmers of hope over the coronavirus lifted risk appetite among investors. The greenback had rallied sharply since March 9th as fears spiked over the economic consequences of lockdowns across the globe. However, signs of a slowdown in the spread of coronavirus prompted flows into risk-sensitive currencies such as the Australian dollar, while safe havens such as gold and the US dollar traded lower.

Data from Johns Hopkins University shows that coronavirus COVID-19 global cases have risen to 1,350,841, with 74,870 fatalities. Hopes were lifted after hard hit Italy reported its lowest daily COVID-19 death toll for more than two weeks on Sunday. Italy’s ISS national health institute director Silvio Brusaferro told reporters, “The curve has started its descent and the number of deaths has started to drop”. He added “If these data are confirmed (in the coming days), we will have to start thinking about phase two”, suggesting that authorities are beginning to think about easing lockdowns.

Meanwhile, the United Kingdom is on edge after Boris Johnson spent the night in intensive care at a central London hospital after his coronavirus symptoms worsened. Numerous world leaders expressed their well wishes, with French President Emmanuel Macron tweeting Monday: “I send all my support to Boris Johnson, to his family and to the British people at this difficult moment. I wish him a speedy recovery at this testing time.”

Global equity markets traded higher in early trading on Tuesday, lifted by signs of the pandemic slowing and also by rising hope that the world’s biggest producers of crude oil will agree to cut output. The euro snapped a six day losing streak against the dollar, rallying over 100 pips as confidence over Eurozone prospects increased. Looking at the EUR/USD daily chart we can see resistance overhead at the 50 period SMA currently at 1.0973, while support lies below in the area of 1.0776.