Extrait:Currently, the US is seen to be doing better than Europe and market players are moving out from the euro to the dollar.
Global coronavirus cases have been rising without any signs of containment and have breached the 3.2-crore mark. While the virus risk is omnipresent, market players have been rattled by resurgence of cases in Europe, which has deepened worries about tighter restrictions and triggered a rush towards the safety of the US dollar.
Both the UK and France reported record-high new coronavirus cases on September 24. Cases are also going up in Spain, The Netherlands and other countries. The rise in infections has caused countries to impose fresh restrictions, dampening economic outlook for the region.
The immediate impact of new cases and restrictions was a shift from riskier assets to safe havens. Equity and commodity markets came under severe selling pressure while safe haven like the US dollar benefitted.
US DJIA index slumped to its lowest since early August while copper slumped to a months low and gold plunged to July lows.
The US dollar index surged to July highs as market players shunned European currencies in favour of the safety of the US currency. Mixed economic data and increasing uncertainty about Brexit has also pressured European currencies.
We are in a situation where the US dollar is being seen as the preferred asset, however, the situation was opposite a few weeks back. The US dollar index slumped to 2018 lows at the start of September as market players shunned US assets amid rising virus cases and uneven economic recovery.
Avertissement:
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