US Dollar Regains Strength as Safe Haven Amid Surge in Coronavirus Cases
Arslan Butt • 1 min read
The US dollar is enjoying some support as a safe haven currency early on Tuesday as markets worry about the continued rise in fresh coronavirus cases across the US and several countries around the world. At the time of writing, the US dollar index DXY is trading at around 90.81.
The mood has turned to risk-off in global markets, weakening leading risky currencies against the US dollar as the focus shifted back from vaccine optimism to the growing number of fresh infections. Traders are expecting more lockdowns and restrictions to be announced in the wake of the fresh wave of the pandemic, which could further weaken the global economy and delay recovery.
The US dollar remains supported amid a surge in coronavirus cases through the country, with the state of California announcing strict lockdowns for at least three weeks. This sentiment has sent traders towards the safety of the greenback, letting it recover from its recent weakness on the back of vaccine optimism and rising hopes for more fiscal stimulus measures.
Meanwhile, the GBP is holding strong against the US dollar over cautious optimism for Britain and the EU to finalize their post-Brexit trade deal soon. Later today, UK PM Boris Johnson is set to meet with European Commission President Ursula von der Leyen, giving traders hopes that a deal could soon be worked out.