Safe Havens Gain As Delta Variant Posses Global Risk

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Safe Havens Gain As Delta Variant Posses Global Risk

JUNE 29, 2021

The U.S. dollar, along with the safe havens Swiss Franc and Japanese yen, is up today as global equity markets are struggling as threats and warnings about the more contagious strand of the coronavirus is dampening the outlook for the global economic recovery.  

Overview

Many nations, especially in Asia, are taking a stricter approach to battle the so-called Delta variant. Asian stocks are heading for their worst close in seven months.  The headaches are also apparent in Europe as Spain took the United Kingdom off its restriction-free travel list.  The U.S. has not been as affected yet, but traders are taking notice. Work from home stocks such as Amazon and Zoom are back in rally mode as travel stocks slipped.  A sustained bout of risk aversion will boost the greenback.

The economic docket is light again today with U.S. houses prices out at 9:00 a.m. followed by June consumer confidence at 10:00 a.m.   The largest risk event on this week’s docket remains Friday’s Non-Farm payrolls.

What to Watch Today…

  • June Consumer Confidence at 10:00 a.m.

View Economic Calendar

AUD  

The Australian dollar was the worst-performing G10 currency overnight.  The risk-sensitive Aussie is under pressure has half of Australia’s population is now under lockdown.  The regional capitals of Perth and Brisbane recently joined Sydney and Darwin in restricting resident’s movement outside of their homes.  Australia has been dogged by a slow vaccine rollout and is struggling to keep the Delta variant in check.

GBP  

The British pound is under pressure this morning as the Delta variant continues to hamper the outlook for the British economy.  Britain reported the most new cases of Covid-19 since January which has been fueled by the more contagious Delta strand.  Despite the struggles, U.K. Prime Minister Boris Johnson said that the end to restrictions in England is “very likely” to go ahead on July 19th.

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