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FOREX-Dollar jumps as stocks tumble; rising COVID-19 cases dent risk appetite

Published 2020-09-21, 10:49 a/m
EUR/USD
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USD/JPY
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USD/CHF
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USD/NOK
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WMB
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DX
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ESZ24
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* Dollar gains against Yen after hitting 6-month low

* Investors go risk-off as investors flee stocks

* Fed speakers in focus this week

* Graphic: World FX rates in 2020 https://tmsnrt.rs/2RBWI5E (Updates prices, adds commentary, changes byline, previous dateline was London)

By Sinéad Carew

NEW YORK, Sept 21 (Reuters) - The U.S. dollar index soared on Monday and riskier currencies fell as investors looked for safety while stock markets around the world tumbled on fears of the economic implications of rising COVID-19 cases.

The euro EUR=EBS and the Australian dollar fell against the greenback, and equities on Wall Street followed Asian and European stock markets lower, as the threat of new pandemic-related lockdowns prompted concerns about the global recovery.

U.S. investors fretted about the ability of U.S. Congress to reach an agreement for more fiscal stimulus. .N MKTS/GLOB

"What we're seeing here this morning for the dollar is largely a risk-off safe haven bid," said Erik Bregar, head of FX strategy at Exchange Bank of Canada in Toronto, adding that the trigger was in the European morning on rising fears of a new U.K. nationwide lockdown.

"It's scary stuff that reminds you of March," he said.

The dollar - subdued during Asian hours - perked up in London trade as European stocks sank to two-week lows and U.S. stock futures fell. ESc1 .EU .N

The index =USD that measures the greenback against a basket of peer currencies was last up 0.64% at 93.555.

RISK SENTIMENT

The greenback also managed to bounce back from a six-month low to turn flat against Japan's yen, which last traded at 104.56 against the dollar after earlier hitting 104.00, which was its lowest point since March 12 JPY= .

"If it takes out the 104 level vis-à-vis the dollar, it (yen) can really take off and then all eyes are going to be on the Bank of Japan because they wouldn't like it one bit," said Exchange Bank of Canada's Bregar.

Marshall Gittler, head of research at BDSwiss, said the yen's rise was part of a typical "risk-off" move in FX markets with the exception of the Swiss franc, which turned weaker. CHF=

"With the pickup in foreign bond yields for Japanese investors getting less and less, capital flows out of Japan may fall even further," he said.

Key for the U.S. currency's direction this week will be a slew of Federal Reserve speakers, who may shed light on the U.S. central bank's new approach to inflation.

Fed Chairman Jerome Powell is due to appear before Congressional committees, while Fed committee members Lael Brainard, Charles Evans, Raphael Bostic, James Bullard, Mary Daly and John Williams (NYSE:WMB) are also making public speeches.

"If Jerome Powell and the rest of the Fed speakers don't really add more meat to the Fed plans for how it's going to reach an average 2% inflation I could see the U.S. dollar trading even higher this week," said Bregar at Exchange Bank of Canada.

The euro traded 0.8% lower than the dollar at $1.1743 EUR=EBS . Sterling also fell 0.9% to trade at $1.28 GBP=D3 as the dollar gained steam.

The Australian dollar traded down 1.2% against the greenback at US$0.7204 AUD=D3 , while the New Zealand dollar NZD=D3 was down 1.5% at $0.6658.

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Currency bid prices at 10:37AM (1437 GMT) Description

RIC

Last

U.S. Close Pct Change

YTD Pct

High Bid

Low Bid

Previous

Change

Session

Euro/Dollar

EUR=

$1.1737

$1.1837

-0.84%

+4.70%

+1.1871

+1.1737 Dollar/Yen

JPY=

104.5500

104.5500

+0.00%

-3.96%

+104.8200 +104.0100 Euro/Yen

EURJPY=

122.70

123.78

-0.87%

+0.62%

+123.9300 +122.5300 Dollar/Swiss

CHF=

0.9156

0.9116

+0.44%

-5.39%

+0.9159

+0.9088 Sterling/Dollar GBP=

1.2799

1.2915

-0.90%

-3.48%

+1.2966

+1.2801 Dollar/Canadian CAD=

1.3304

1.3204

+0.76%

+2.45%

+1.3306

+1.3172 Australian/Doll AUD=

0.7201

0.7289

-1.21%

+2.54%

+0.7324

+0.7201 ar

Euro/Swiss

EURCHF=

1.0746

1.0792

-0.43%

-0.98%

+1.0799

+1.0740 Euro/Sterling

EURGBP=

0.9167

0.9162

+0.05%

+8.43%

+0.9196

+0.9148 NZ

NZD=

0.6657

0.6759

-1.51%

-1.17%

+0.6777

+0.6658 Dollar/Dollar

Dollar/Norway

NOK=

9.3138

9.0931

+2.43%

+6.10%

+9.3156

+9.0646 Euro/Norway

EURNOK=

10.9329

10.7666

+1.54%

+11.13%

+10.9339

+10.7600 Dollar/Sweden

SEK=

8.8651

8.7470

+0.25%

-5.16%

+8.8661

+8.7383 Euro/Sweden

EURSEK=

10.4045

10.3781

+0.25%

-0.62%

+10.4185

+10.3714

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