Left Menu
Development News Edition

Euro set for seventh day of gains, dollar loses to riskier assets

Reuters | Washington DC | Updated: 03-06-2020 15:26 IST | Created: 03-06-2020 15:21 IST
Euro set for seventh day of gains, dollar loses to riskier assets
Representative Image Image Credit: ANI

The euro topped an 11-week high on Wednesday, on track for a seven-day winning streak, and the dollar fell against most currencies as the prospects of more stimulus and hopes for economic recovery led investors to buy riskier assets. The Australian dollar hit a five-month high of 0.6982 against the U.S. dollar, as funds sought exposure to economies expected to make the fastest recoveries from the coronavirus pandemic.

The U.S. dollar also fell against the British pound, the Norwegian and Swedish crowns, and the Canadian dollar as mass protests against racism across the United States weighed on the currency. An index following the dollar against six major currencies fell to nearly a three-month low of 97.28.

"The strengthening of the risk-linked Aussie and Kiwi, combined with the weakness of the safe-havens dollar, yen, and franc, suggests that investors continued increasing their risk exposures for another day," Charalambos Pissouros, senior market analyst at JFD Group, said. "It seems that investors are still looking past the U.S.-China tensions and the civil unrest in the U.S.," he said.

President Donald Trump has threatened to use the military to quell protests against racism and police brutality. U.S. stocks continue to rally, however, leaving some currency traders confused about the market's direction. Generally, traders preferred to bet on a global economic recovery. Dollar/yen was last up 0.1% at 108.79.

The euro reached an 11-week high of $1.1125 on expectations policymakers will support the euro zone's weakest economies with debt purchases. The common currency was last up 0.4%. The seven-day winning streak was the longest since December 2013. The euro also rose against the Swiss franc to $1.0797 , the highest since Jan. 14, trading last up 0.4%.

The euro disregarded a contraction in economic activity in May reported by IHS Markit's Final Composite Purchasing Managers' Index (PMI). In addition, the number of people that lost their jobs in the euro zone in April was 211,000, bringing the number of the unemployed to 11.919 million or 7.3% of the workforce, up from 7.1% in March.

But investors did care about expectations the European Central Bank will increase its 750 billion-euro ($839.25 billion) bond-buying programme, the Pandemic Emergency Purchase Programme, when it meets on Thursday. Investors also hoped a 750 billion-euro recovery fund proposed by the European Commission would soon take form and bolster-the worst performing countries in the bloc.

But Kit Juckes, macro strategist at Societe Generale, said he was "more wary of the euro than some other currencies" because he doubted the implementation of the recovery fund as proposed and that the ECB could continue to inject liquidity into markets, due to a German court ruling a few weeks ago. The Chinese yuan rose to nearly a one-month high of 7.0883 against the dollar in the offshore market. China was the first major economy to ease strict lockdown restrictions, making it likely to recover earlier than other countries.

The Norwegian crown hit a three-month high of 9.4735 against the U.S. dollar, last trading up 0.8%. The currency is so far the best performing in the G10 space. The New Zealand dollar was up 0.3%, having reached earlier a three-month high of 0.6430.

The Aussie dollar was last neutral at 0.6895.


TRENDING

OPINION / BLOG / INTERVIEW

COVID-19 seems cooking biggest ever global scam

The increasing number of corruption cases on COVID-19 funds from throughout the world and involvement of high profile persons indicate that the countries cant ignore corruption in their pandemic response programs. This has generated the nee...

Health Management Information Systems lack holistic, integrated, and pandemic resilient character

Being a part of the United Nations system, the World Health Organization WHO deserves its share of rebuke for its alleged failure issue COVID-19 health emergency alerts on appropriate time. However, the pandemic has also exposed loopholes i...

Pride in the time of coronavirus: a welcome move online?

This year is different in many ways not least as celebrations are also taking place against the dramatic backdrop of a global health crisis and a resurgence in grassroots activism following the death of George Floyd in Minneapolis. ...

COVID-19: Weighing up the benefits and limitations of edtech platforms

Edtech companies shouldnt focus on merely pushing contents, but to provide an interactive, effective teaching and learning environment. ...

Videos

Latest News

Kanpur encounter: Main accused Vikas Dubey received call from police station before cops came to arrest

The main accused in the Kanpur encounter case, Vikas Dubey, had received a phone call from the police station before the police came to arrest him following which he had called other accomplices and fired bullets on the police personnel, cl...

Noose found at Johns Hopkins University construction site

Johns Hopkins University is investigating the discovery of a rope tied into a noose at a construction site in a building it owns off its Baltimore campus. Johns Hopkins officials also notified federal authorities about what the university c...

Working on 'Downton Abbey' was overwhelming: Laura Carmichael

Actor Laura Carmicheal says working with the likes of Hugh Bonneville on Downton Abbey was initially daunting as the hit period drama was her first acting job. The 33-year-old actor, who played Lady Edith Crawley on the ITV series, said all...

Delhi: Amit Shah, Rajnath Singh visit DRDO-built Sardar Vallabhbhai Patel COVID-19 Hospital

Union Home Minister Amit Shah and Defence Minister Rajnath Singh visited the DRDO-built Sardar Vallabhbhai Patel COVID-19 Hospital in Delhi Cantonment on Sunday. Union Health Minister Dr Harsh Vardhan, Delhi Chief Minister Arvind Kejriwal a...

Give Feedback