Dollar rises on coronavirus unease


Shafaq news/ The U.S. dollar rose against major currencies on Wednesday, supported by positive U.S. economic data and concerns about a second wave of coronavirus infections in Europe and Britain.

Sentiment for the euro has slowly weakened as investors grow increasingly worried about surging coronavirus infections in countries like France and Spain, raising the risk of fresh lockdowns.

Many euro zone countries have reintroduced travel restrictions, forcing airlines to scale back passenger services after a relatively quick run up over the summer.

Traders in the pound and the euro are also worried that Britain and the European Union will fail to agree a free trade deal, which would cause additional economic strain.

Both the Australian and New Zealand dollars were undermined by a dovish slant on policy by their respective central banks.

The Australian dollar fell to a six-week low of $0.7116 after economists at Westpac changed their view and said they expect the RBA to lower interest rates to 0.10% from 0.25% at a meeting on Oct. 6.

The New Zealand dollar lost 0.33% to $0.6612 after the Reserve Bank of New Zealand held its policy rate at 0.25%, but warned of job losses and business closures, which reinforced expectations it would move to negative interest rates in coming months.

The pound bought $1.2744, near the lowest since late July, after British Prime Minister Boris Johnson unveiled new restrictions on business activity to tackle a second wave of the coronavirus.

The dollar was quoted at 0.9198 Swiss franc, holding onto a 0.6% gain from Tuesday.

The US currency was little changed at 105.06 yen.

Traders in the pound and the euro are also concerned about the failure of Britain and the European Union to agree on a free trade agreement, which could cause additional economic pressure.

The dollar index, which places the dollar against a basket of six major currencies, rose to 94.197 on Wednesday which is the highest level in two months.

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