Dollar Remains Steady as Global Stocks Rise
APRIL 06, 2020
The U.S. dollar’s recent rally has taken a breather to start the week and the Dollar Spot Index is largely unchanged from Friday’s close.
Global equities are higher this morning as some death rates abroad and in New York looked to have slowed somewhat. Nevertheless, President Trump has warned of a “very, very deadly period” over the next two weeks.
Oil prices are lower again this morning after a virtual OPEC+ meeting scheduled for today was pushed back until likely Thursday. Oil futures fell as much as 11% over the weekend but Crude and Brent are now down only 3.5% and 2.5%, respectively.
With little on the economic docket today, the greenback will take its cues from risk trading and Covid-related headlines.
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The Euro has taken a beating against King dollar recently but was able to stem those losses to start the week. Risk sentiment has improved on signs that many of Europe’s worst hit countries may be showing signs of plateauing. Deaths in Italy, France and Spain slightly declined over the weekend. While it is way to early to declare the worst behind us in Europe, market participants are obviously hungry for positive signs.
European Finance ministers will virtually meet tomorrow is hopes of solidifying a united front and coordinated action to take on the ill effects of the virus.
The British pound experienced a quick sell-off when markets reopened yesterday afternoon on news that British Prime Minister Boris Johnson was being admitted to the hospital. It was previously reported that Johnson tested positive for Covid-19 but after 10 days of trying to shake the disease, the PM was hospitalized for tests. Johnson’s office has stated the hospitalization is only a precaution, but it was enough to cause the sterling to take a dive. However, the sterling has reversed course in early trading and is actually now higher than Friday’s close, likely on improved risk sentiment.
The economic docket showed that GfK’s consumer confidence registered its biggest drop on record.