US Dollar Back in Favor as Markets Fear More Lockdowns
Arslan Butt • 1 min read
The US dollar is strengthening against most of its major rivals early on Monday as its safe haven appeal receives a boost amid reports of the UK’s announcement of a new strain of coronavirus that is spreading more rapidly. At the time of writing, the US dollar index DXY is trading around 90.64.
Following the discovery of the latest and more contagious strain of coronavirus, the British government has imposed a tighter lockdown across London and other parts of the country, weakening the GBP. European countries have also announced a ban on international travel to and from the UK, heightening the risk-off mood in markets and supporting the US dollar.
Even reports of developments in the US around the coronavirus relief bill have failed to hold back the US dollar which has regained favor among traders amid worries of fresh lockdowns across the world. In addition, Brexit uncertainties are also supporting the risk-off sentiment, driving investors towards the safety of the greenback for now.
The risk averse mood has also driven traders away from commodity currencies like the AUD and the NZD. Meanwhile, the US dollar has also managed to strengthen against the safe haven Japanese yen as well.