US Dollar Steady, Supported by Rise in Cases and Lockdowns

US Dollar Steady, Supported by Rise in Cases and Lockdowns

Posted Monday, November 2, 2020 by
Arslan Butt • 1 min read

At the start of a brand new trading week, the US dollar is trading mostly unchanged against its major peers in anticipation of the results of the presidential elections. At the time of writing, the US dollar index DXY is trading around 94.14.

The US dollar posted the highest weekly gain seen since late September over the previous week, as traders cautiously wait to know who will be the next leader of the world’s most powerful economy. In addition, the safe haven appeal of the greenback also enjoys support amid a spike in coronavirus infections all over the world.

With several countries across Europe bringing back lockdowns to contain the spread of the pandemic, the risk-off sentiment has been triggered in markets, sending traders towards the safety of the US dollar. Over the past five weeks alone, the number of new cases reported across Europe have doubled, while total number of infections have exceeded 10 million.

This has resulted in a massive sell-off in the Euro over the past few sessions, as countries like France and Germany announced new lockdowns. Meanwhile, the GBP has also weakened against the dollar after UK PM Boris Johnson imposed a month-long lockdown after the daily tally of cases crossed 20,000 in Britain.

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