By Peter Nurse
Investing.com – U.S. The dollar was marginally lower in early European trade on Monday, consolidating after hitting a two-week high against its large peers overnight amid growing fears of another wave of coronavirus infections.
02:55 ET (0655 GMT), the one that tracks the greenback against a basket of six other currencies stood at 100.248, largely flat as of late Monday, after climbing to 100,513, a two-week high. rose 0.1% to 1.0817, after falling below $ 1.0800 for the first time in nearly a week. edged 0.1% lower to 1.2323 and dropped 0.1% to 107.55.
As countries around the world are gradually easing the restrictions in an attempt to restart their economies, investors are becoming anxious about another wave of infections.
The central Chinese city of Wuhan, where the pandemic originated, reported on Monday five new cases, the first new cases since its shutdown, while South Korea, the Asian poster child on how to deal with the virus, has had to fight a new spike in cases.
In Europe, the Robert Koch Institute of Germany reported that the “rate of reproduction” – the number of people every person infected with coronavirus continues to infect – had increased to 1.1. Any speed above 1 means that the virus spreads exponentially.
The greenback was also bent by a stronger U.S. yield curve when Federal Reserve officials said the prospect of negative rates – St. Louis Fed President James Bullard said Monday that negative rates on the state side would be “problematic.” His colleagues from Atlanta and Chicago, Raphael Bostic and Charles Evans, were similarly dismissive.
Another two Fed speakers are scheduled to speak late Tuesday – Philadelphia’s Patrick Harker and Cleveland’s Loretta Master – and they’re likely to think on the subject.
One of the biggest losing currencies on Tuesday was the Australian dollar, which gave up its recent gain after China suspended meat imports from four Australian slaughterhouses, fueling concerns that escalating tensions between the two nations are hurting Australia’s most important trading relationship.
02:55 ET traded 0.3% lower at 0.6470.
“We are hard pressed to see a strong case to buy reflationary currencies yet; in the short term, “Danske Bank analysts said in a research note.
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