Dollar Down Over Continuing Rise in Global COVID-19 Cases

By Gina Lee Investing.com – The dollar was down on Monday morning in Asia, with the ever-increasing number of COVID-19 cases counterbalancing hopes that a working vaccine will become available soon and kickstart the economic recovery from the virus. In Asia, fifteen countries signed the Regional Comprehensive Economic Partnership trade deal on Sunday. The agreement whet investors’ risk appetite over hopes for an improvement in trade hit by U.S.-China tension. The U.S. Dollar Index that tracks the greenback against a basket of other currencies edged down 0.14% to 92.588 by 10:05 PM ET (2:05 AM GMT). However, the previous week’s optimism, which boosted the greenback, was subdued as the number of COVID-19 cases increased globally, decreasing risk appetite. There were over 54 million cases worldwide and over 1.3 million deaths as of Nov. 16, according to Johns Hopkins University data. There are over 11 million cases in the U.S. alone, according to the data. “Currency moves which were prompted by positive vaccine news have taken a pause. With no additional, positive news on the vaccine, U.S. interest rates and stocks went into correction mode at the end of the week, and USD/JPY fell,” Mizuho Securities chief currency strategist Masafumi Yamamoto said. Incumbent U.S. president Donald Trump was active on Twitter over the weekend, briefly acknowledging losing the election to Joe Biden on Sunday in a morning Twitter post but backtracking later in the day, tweeting that he concedes “nothing” and vowing to keep up a court fight that is deemed unlikely to succeed by experts. Meanwhile, Biden continues preparations to take office in January and tackling COVID-19. Biden is due to meet with pharmaceutical companies developing COVID-19 vaccines. “Over the weekend, uncertainty around the U.S. presidential election has declined as it became more certain that Joe Biden secured more votes, and it’s easier for traders to take risks on hopes that the next administration would soon take measures against COVID-19,” Yamamoto said. The dollar could strengthen against the yen should U.S. bonds and stocks maintain their upward moment, he added. The USD/JPY pair inched down 0.07% to 104.55, with the yen seeing its worst weekly performance since early June during the previous week. The USD/CNY pair was down 0.27% to 6.5859. China’s industrial production rose 6.9% year-on-year in October, above the forecast 6.5% growth but remaining on par with September’s reading. The unemployment rate fell to 5.3% from September’s 5.4%. The AUD/USD pair was up 0.37% to 0.7295. Investors await a speech by Reserve Bank of Australia (RBA) governor Philip Lowe later in the day, with the minutes from the RBA’s November meeting due to be released on Tuesday. The country is also monitoring a growing number of COVID-19 cases in South Australia state. The NZD/USD pair gained 0.60% to 0.6885. The GBP/USD pair was up 0.27% to 1.3222. Investors are continuing to focus on the ongoing Brexit talks between the U.K. and the European Union, with U.K. chief Brexit negotiator David Frost warning on Sunday that while the two sides made some progress towards a post-Brexit trade deal in negotiations, they might not succeed in getting an agreement. However, the resignation of Dominic Cummings, adviser to U.K. Prime Minister Boris Johnson and a proponent of a "hard" Brexit, raised hopes for a deal. Cummings’ resignation comes into effect in mid-December.


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