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Fri 19 Jul 2024 13:42GMT

US Dollar (USD) Under Pressure as American Covid-19 Cases Rise

Published: 29 Jun at 5 PM Tags: Euro, Dollar, Pound Sterling, America, UK, Eurozone, Australian Dollar, New Zealand Dollar, Canadian Dollar, Australia, New Zealand, USA, Canada, China,

Pound (GBP)

The Pound (GBP) suffered today after the UK’s Mortgage Approvals figures for May fell to record lows. As a result, GBP investors have becoming increasingly concerned for Britain’s economic recovery going forward.

Today also saw Downing Street drop hints that it could be aiming for September to wrap up its post-Brexit negotiations with the European Union. Consequently, this has sparked fears that the UK could be heading for a no-deal Brexit in December.

Euro (EUR)

The Euro (EUR) benefited from an uptick in the Eurozone’s economic and consumer sentiment gauges for June. Economic sentiment improved across the bloc at 75.7 this month, buoying confidence in the Eurozone’s ability to recover from the Covid-19 crisis.

However, with the Eurozone under considerable strain from the coronavirus – and with emerging data showing signs of an increasing number of cases of the virus across the Euro-area – single currency investors are remaining cautious.

US Dollar (USD)

The US Dollar (USD) has struggled the past few weeks on concerns over the world’s largest economies. Today also saw investors anxious over whether America could renew lockdown measures as the nation faces increasing numbers of coronavirus cases.

Today also saw the release of the US Pending Home Sales report for May, which beat forecasts and rose to 44.3%.

However, with investors seeking out riskier assets today, the ‘Greenback’ performed modestly against its peers.

Canadian Dollar (CAD)

The Canadian Dollar (CAD) was subdued today after oil prices slid for their second straight season today, leaving many ‘Loonie’ investors concerned over the nation’s economic recovery.

Oil is one of Canada’s major exports, so any signs of dipping prices is CAD-negative.

Instead, ‘Loonie’ investors will be looking ahead to tomorrow’s release of April’s final Canadian GDP figure. Any signs of improvement could buoy the Canadian Dollar as investors become more hopeful that the nation could be on a slow road to recovery.

Australian Dollar (AUD)

The Australian Dollar (AUD) has benefited from improved risk sentiment today, with hopes of a coronavirus vaccine and a global economic recovery buoying the risk-averse ‘Aussie’.

Now that most countries are easing their lockdowns and coronavirus guidelines, there is more optimism that the world’s global economy could now be on the road to recovery.

However, ‘Aussie’ investors are becoming concerned for Australia’s own coronavirus crisis. With the number of cases increasing across the nation, we could see the ‘Aussie’s gains being short-lived.

New Zealand Dollar (NZD)

The New Zealand Dollar (NZD) improved on hopes of a Covid-19 vaccine after it was reported that a company in China had revealed positive results in its initial candidate trials.

As a result, the risk-sensitive ‘Kiwi’ rose on optimism that the global economy could see a faster-than-expected recovery.

Furthermore, there have been many reports that New Zealand’s economy could recover from the coronavirus pandemic better than most other nations.

As of Monday, 29th June 2020, the Pound Sterling currency rates mentioned within this news item were as follows:

GBP EUR exchange rate was 1.0943, GBP USD exchange rate was 1.231, GBP AUD exchange rate was 1.791, GBP NZD exchange rate was 1.9153, GBP CAD exchange rate was 1.6809, and GBP CNY exchange rate was 8.7168.
Dominic Lee About Author: (474 Posts)With over ten years experience as an economist – including four years spent as a chief economist with a major currency broker – Dominic has acquired a wealth of knowledge which he uses to forecast market movements. Dominic now works as an independent business advisor and writes for several financial publications.

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