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Fresh Spike in Coronavirus Cases Boosts Safe Haven US Dollar

At the start of a brand new trading week, the US dollar is enjoying support as a safe haven currency amid a fresh spike in the number of coronavirus cases across parts of the US and Europe. At the time of writing, the US dollar index DXY is trading around 92.94.

The US dollar has firmed against its major rivals as markets worry about the possibility of more lockdown measures being announced to combat the sudden resurgence in cases across several countries. The number of new cases being reported have hit record highs in the US and France, even as Italy announced curfews on restaurants and bars in a bid to contain the spread of the virus.

Lack of clarity on the next round of stimulus measures in the US has also helped the US dollar regain some of its strength in recent sessions. While lawmakers signal that talks are making progress, there has been no confirmation so far on when the coronavirus relief package will be finalized and announced.

The greenback has also found support as the mood in the market turns cautious ahead of the US presidential elections on November 3. The risk sentiment has weakened, sending equity futures lower and sending traders towards the safety of the dollar. However, a victory for Democrat Joe Biden could weaken the dollar as it would signal the rollout of a bigger stimulus package.

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Arslan Butt
Index & Commodity Analyst
Arslan Butt serves as the Lead Commodities and Indices Analyst, bringing a wealth of expertise to the field. With an MBA in Behavioral Finance and active progress towards a Ph.D., Arslan possesses a deep understanding of market dynamics.His professional journey includes a significant role as a senior analyst at a leading brokerage firm, complementing his extensive experience as a market analyst and day trader. Adept in educating others, Arslan has a commendable track record as an instructor and public speaker.His incisive analyses, particularly within the realms of cryptocurrency and forex markets, are showcased across esteemed financial publications such as ForexCrunch, InsideBitcoins, and EconomyWatch, solidifying his reputation in the financial community.
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