U.S. virus cases surge; risk appetite falls U.S. spending,...

  1. 184,651 Posts.
    lightbulb Created with Sketch. 2711
    • U.S. virus cases surge; risk appetite falls
    • U.S. spending, income data mixed, shows economy weathering storm
    • Graphic: World FX rates in 2020 http://tmsnrt.rs/2egbfVh

    (Recasts, adds new comment, FX table, updates prices, changes byline, dateline; previous LONDON)

    The safe-haven dollar rose on Friday, as investors grew cautious about a resurgence in U.S. coronavirus cases that has cast doubts on expectations about a V-shaped recovery for the world's largest economy.

    Currencies that thrive with higher risk appetite such as the euro, sterling, as well as commodity-linked currencies like the Australian, New Zealand, and Canadian dollars struggled against the greenback.

    Cases rose across the United States by at least 39,818 on Thursday, the largest one-day increase of the pandemic, with Texas becoming the new hot spot for the novel coronavirus. More than 36,000 new U.S. cases were recorded on Wednesday, a few hundred shy of the record 36,426 on April 24.

    "There's an inverse correlation between the risk sentiment and the dollar," said Erik Bregar, head of FX strategy, at Exchange Bank of Canada. "Whenever we get headlines that hurt risk sentiment, that helps the dollar."

    In midmorning trading, the dollar rose 0.2% against a basket of currencies to 97.571 =USD . The dollar showed little reaction after the data showed U.S. consumer spending, which accounts for more than two-thirds of U.S. economic activity, jumped 8.2% last month. That was the largest increase since the government started tracking the series in 1959.

    That said, personal income fell 4.2% last month. "On balance, today’s mixed numbers validate the view that the economy has weathered the worst of the coronavirus but underscore what’s expected to be a choppy road to recovery," said Joe Manimbo, senior market analyst at Western Union Business Solutions in Washington.

    The euro, meanwhile, reversed gains against the dollar to trade 0.1% lower at $1.1202 EUR=EBS . Traders said there were $2 billion in option expiries in the currency pair that went off at earlier in the session at the $1.12 strike.

    That said, the euro was on track to end the week on a positive note.

    Bank of America Merrill Lynch's trading platforms and broader positioning surveys indicate currency markets are long euro/dollar, though positioning is not stretched.

    In other currencies, the commodity-tied units fell, with the Australian dollar down 0.6% at US$0.6885 AUD=D3 . The U.S. dollar gained 0.6% at C$1.3712 CAD=D3 .

    	======================================================== 
    	Currency bid prices at 10:45AM (1445 GMT) 
    
     Description	  RIC		 Last		   U.S. Close  Pct Change	 YTD Pct	 High Bid	Low Bid 
    											  Previous				   Change				  
    											  Session											
     Euro/Dollar	  EUR=		$1.1202		$1.1217	 -0.13%		 -0.07%	  +1.1239	 +1.1196 
     Dollar/Yen	   JPY=		107.1600	   107.1900	-0.03%		 -1.56%	  +107.2400   +106.8100 
     Euro/Yen		 EURJPY=	 120.05		 120.23	  -0.15%		 -1.56%	  +120.3300   +119.8100 
     Dollar/Swiss	 CHF=		0.9490		 0.9483	  +0.07%		 -1.94%	  +0.9496	 +0.9470 
     Sterling/Dollar  GBP=		1.2329		 1.2414	  -0.68%		 -7.03%	  +1.2437	 +1.2321 
     Dollar/Canadian  CAD=		1.3704		 1.3636	  +0.50%		 +5.53%	  +1.3714	 +1.3627 
     Australian/Doll  AUD=		0.6848		 0.6885	  -0.54%		 -2.48%	  +0.6895	 +0.6842 
     ar																							  
    
     Euro/Swiss	   EURCHF=	 1.0634		 1.0639	  -0.05%		 -2.01%	  +1.0645	 +1.0629 
     Euro/Sterling	EURGBP=	 0.9086		 0.9030	  +0.62%		 +7.48%	  +0.9089	 +0.9024 
     NZ			   NZD=		0.6408		 0.6428	  -0.31%		 -4.88%	  +0.6450	 +0.6407 
     Dollar/Dollar																				   
    
     Dollar/Norway	NOK=		9.7335		 9.6582	  +0.78%		 +10.88%	 +9.7539	 +9.6443 
     Euro/Norway	  EURNOK=	 10.9030		10.8420	 +0.56%		 +10.85%	 +10.9225	+10.8260 
     Dollar/Sweden	SEK=		9.3655		 9.3147	  +0.41%		 +0.19%	  +9.3770	 +9.3085 
     Euro/Sweden	  EURSEK=	 10.4944		10.4515	 +0.41%		 +0.24%	  +10.5015	+10.4490 
    	<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ 
    G10 FX monthly	https://tmsnrt.rs/384McNp 
    
    	^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>                    
 
arrow-down-2 Created with Sketch. arrow-down-2 Created with Sketch.