The safe haven dollar rose on Wednesday, pushing the euro to a minimum of one week for customers of a national blockade in Germany and France as coronavirus cases increased, with indicators of volatility implicit in the non-unusual currency and the yen reaching multi-month highs. investors located for next Tuesday’s U. S. election.
Germany and France were preparing to announce restrictions Wednesday at the point of last spring’s general closures, while COVID-19 deaths in Europe increased by almost 40% in a week, while money markets fell due to fears of the most likely economic. Costs.
The European Commission proposed on Wednesday a series of new measures to combat the COVID-19 pandemic in the European Union, and said that the new uptick in infections on the continent is “alarming. “
Vasily Serebriakov, UBS’s forex strata in New York City, said COVID-19 cases in Europe and around the world and the possibility of additional closures have reduced the market’s appetite for risk.
With the news that Pfizer Inc has yet to know the extent to which its late-stage COVID-19 vaccine protects against the disease, adding to cautious mood, the riskiest assets have fallen on the markets.
At the same time, investors are in favor of volatility before and after the US election.
Democratic presidential candidate Joe Biden leads Republican President Donald Trump nationally with 10 points, according to a Reuters / Ipsos poll.
“We are seeing a relief in positions before the election, as the market is short of dollars,” Said Serebriakov of UBS.
“Expectation is Biden’s presidency and that is consistent with a weaker dollar story. But as some polls have hardened in recent days, markets are simply taking something because of the uncertainty,” he added.
Ubs’ strata said a Biden administration would calm industry tensions with classic allies like Europe and Canada, as well as China, who deserve overall market sentiment and weigh on the dollar as a safe haven.
By mid-morning, the euro fell by 0. 5% against the dollar to $1,1736, after falling to a minimum of one week.
However, the dollar fell 0. 1% against the yen to 104. 33 yen. Previously, it had fallen at least a month.
The euro fell 0. 6% against the yen to 122. 44 yen, after falling to its lowest point since July.
One-week indicators of implied volatility in euros and yen reached their point in just seven months.
This suggests that investors are in favor of sudden value movements, focusing on the United States as they struggle to involve their coronavirus outbreak before next Tuesday’s key election.
Legal battles between Republicans and Democrats over how to count votes are more likely to challenge the final results of the election.
The dollar index, which tracks the opposite of a six-currency basket, rose 0. 3% to 93. 45.
Elsewhere, sterling fell by 0. 7% to $1,2958.
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