The U.S. dollar and yen appeared to strengthen on Thursday. This is due to rising cases of coronavirus and little progress towards a U.S. stimulus deal that has previously unsettled investors. Slowly this progressed and progressed well.
Meanwhile, the Australian dollar hit a one-week low after the head of the central bank hinted at loosening at an upcoming meeting. On the other hand, coronavirus infections are also increasing in some places. This has an impact on market developments.
Some countries have even begun issuing regulations related to the virus. France has imposed a curfew because autumn brings a sharp increase in daily infections. The situation sparked concerns about a new wave of lockdowns around the world.
Yen Safe Heaven Data
The safe-haven yen was at 105.25 per dollar in early trading. The figure was slightly below the two-week high of 105.04 overnight. The greenback is still holding out, except against sterling which has surged due to signs of progress in Brexit talks.
The Australian dollar also fell as much as half a percent to $0.7129. The situation comes after Reserve Bank of Australia Governor Philip Lowe cited bond purchases and a rate cut as among options for policy support during the recovery.
This is a fairly explicit policy option that would reasonably be considered. Here's what Westpac FX analyst Sean Callow said. There was enough vibe there for the market to lean (thinking) that they were going to do something. The market situation is conducive.
U.S Stimulus Plan Still Uncertain
Elsewhere, U.S. stimulus plans still seem to be stuck or have yet to show any certainty. This relates to presidential elections to be held in the country. The election is about to take place and many feel there is not enough time for stimulus.
Getting things done before the election and carrying it out will be difficult. This opinion was delivered by U.S. Treasury Secretary Steve Mnuchin on Wednesday. He added that he and House Democratic Leader Nancy Pelosi are still "a long way off" in their spending priorities.
This situation has supported the US dollar in the short term by weighing on investor sentiment and increasing demand for safer assets. Against some currencies, the greenback was considered stable at 93.400 and stood at $1.1749 against the euro.
The pound stuck to its rise of 0.5% overnight as the EU and UK are set to extend Brexit talks past the mid-October deadline. Not without purpose, there are targets and expectations as to why talks on Brexit are still ongoing.
Brexit and the Deal Still Being Talked About
Brexit deal talks are still underway to try to bridge the gap holding back new trade agreements. This is according to sources and documents. It is seen as a positive thing for sterling as there are some risks that may occur in the future.
For example it the risk that (British Prime Minister Boris Johnson) might tell his EU counterparts that he is leaving. This is what national Australia Bank's FX chief Ray said. Attrill. For information, Sterling was last at $1.3018 on the global market.
Elsewhere, the lockdown option has led some commodities to slump. One of them is oil. It is rumored that the commodity is now falling due to lockdown concerns. Of course, many expect that demand will be less because of the policy.
The Corona Cases in Some Countries
Some European countries are reviving curfews and lockdowns to try to contain an increase in new coronavirus cases. The UK is expected to impose tighter COVID-19 restrictions in London from midnight on Friday. So is France.
India, the world's third-largest oil consumer, is on track to overtake the United States with the world's largest COVID-19 infection. Even the country is bracing for a spike in cases in the coming weeks as it heads into its main holiday season.