Business in dollars as threat of Delta virus hangs over “Freedom Day”

  • Risk-sensitive AUD hits lowest in 2021
  • Dollar and yen significantly higher against Asian currencies in risk averse trading
  • Investors nervous as England drops virus restrictions

SINGAPORE, July 19 (Reuters) – The dollar approached its highest levels in months on Monday as the spread of the Delta coronavirus variant made investors nervous about the global recovery and sent money to safety .

The risk-sensitive Australian dollar fell to its lowest level against the greenback since the start of December in the Asian session and hit a five-month low against the safe haven yen. The dollar has also appreciated significantly against Asian currencies.

Daily infections have increased from the United States and Europe to Asia, and the seven-day global average of new cases each day exceeds half a million for the first time since May. Traders are holding their breath as England lifts most social barriers.

The Aussie last lost 0.2% to $ 0.7381 and the New Zealand dollar also fell 0.2% to $ 0.6986. The yen, which appreciated widely, appreciated by 0.2% to 109.90 per dollar and by about the same margin at 129.69 per euro.

“The market is really trading on the uncertainty in the air around COVID,” Rodrigo Catril, National Australia Bank senior currency strategist, said during the bank’s morning podcast.

“This is the dominant factor,” he said, although the addition of a surprise drop in US consumer confidence also unsettled investors. Read more

The US dollar index held steady at 92.729, not far from last week’s high of 92.832. The euro settled at $ 1.1801, just a little lower than last week’s three-month low of $ 1.1772.

The week’s data schedule is pretty bare until Friday, when the Global Purchasing Managers Index numbers are released, with policy and virus response expected pending as lockdowns tighten and s ‘are expanding into Asia. Read more

There is an external chance that China’s benchmark lending prime rate will be lowered on Tuesday and the European Central Bank, which is meeting on Thursday, signaled an adjustment to its guidance. Read more

Sterling, meanwhile, wobbled to $ 1.3755, its lowest level in more than a week, as hopes shift to so-called ‘Freedom Day’, with England betting its rush to vaccinate the population will mean people are less likely to become seriously ill with COVID-19.

The relaxed rules have already been met with a mixture of nerves and excitement from London clubbers in the wee hours, but the day also starts with skeptical epidemiologists and the Prime Minister, Minister of Finance and Minister of Health themselves isolating themselves as cases spread. Read more

“The Netherlands has eased all restrictions and seen cases drop from 500 to 10,000 a day in two weeks, and the government has had to back down and is now eagerly awaiting what happens to the hospitalizations,” ANZ Bank analysts said.

“The UK’s ‘freedom day’ today has some concerns it may have a similar experience.”

Cryptocurrencies were flat in morning trading, with bitcoin holding near strong support at $ 31,590.

Elsewhere, the dollar continued to rise against Asian emerging market currencies, sending the tourism-dependent Thai baht to a new 15-month low and the Malaysian ringgit to its lowest in nearly a year.

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Price of currency offers at 0144 GMT

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BOJ Tokyo Forex Market Information

Reporting by Tom Westbrook Editing by Shri Navaratnam

Our standards: Thomson Reuters Trust Principles.

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