Dollar rally regains some momentum; Aussie and Kiwi fall
Mon Aug 10 2020
Lucy Harlow (3316 articles)

Dollar rally regains some momentum; Aussie and Kiwi fall

The dollar rose in early London trading on Monday, including versus the euro and Swiss franc, with investors focusing on fiscal stimulus in the United States and U.S.-China tensions ahead of key trade talks on August 15.

After talks in Washington over the next round of fiscal stimulus broke down, U.S. President Donald Trump signed executive orders on Saturday, partially restoring enhanced unemployment payments to tens of millions of jobless Americans.

“A little stimulus is simply better than none at all,” wrote Commerzbank analyst Thu Lan Nguyen.

“At least that is how the market seems to see it, which is why the U.S. Dollar is trading moderately stronger,” she added.

Speculators increased their net short dollar positions in the latest week, according to weekly futures data on Friday.

The dollar index was at 93.5 at 0730 GMT, up 0.1% on the day.

The euro was down 0.2% versus the dollar, at $1.17685, while the safe-haven Swiss franc was had also slipped 0.2% versus the U.S. currency to 0.914.

The dollar had strengthened at the end of last week as tensions between the United States and China escalated, with the U.S. imposing sanctions on top Hong Kong and Chinese officials.

Prominent democracy activist, Hong Kong media tycoon Jimmy Lai, was arrested under China’s new national security law on Monday, while U.S. health chief Alex Azar visited Taiwan on Sunday – a trip condemned by China which claims the island as its own.

Senior U.S. and Chinese officials will meet via teleconference on August 15 to review the implementation of their Phase 1 trade deal and likely air mutual grievances.

Overnight data showed China’s industrial activity picked up in July, boosting hopes for an economic recovery and driving early gains in European stocks.

The Norwegian crown gained versus the dollar, up around 0.1% at 9.0430.

The New Zealand dollar was down 0.2% versus the dollar, at 0.6588.

The Australian dollar was subdued, down 0.1% versus the U.S. dollar at 0.71525, after the country recorded a record-high daily increase in COVID-19 deaths on Monday. Prime Minister Scott Morrison said internal border closures were unlikely to be lifted before Christmas.

Australia’s central bank downgraded its outlook for the national economy on Friday and warned unemployment would stay high for several years.

Lucy Harlow

Lucy Harlow

Lucy Harlow is a senior Correspondent who has been reporting about Commodities, Currencies, Bonds etc across the globe for last 10 years. She reports from New York and tracks daily movement of various indices across the Globe

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