Daily Currency Update
USD - United States DollarTraders rushed to safe haven currencies on Thursday after the US surpassed 2 million cases of the disease caused by COVID-19. Safe haven currencies led majors higher through trade on Thursday with the CHF, JPY and USD all benefiting from the shift in risk sentiment. Having lost nearly 5% through the last month, the US dollar index jumped sharply, gaining 1% on the day as the AUD, NZD and CAD led commodity currencies lower while the Euro and GBP both suffered modest corrections.With new hot spots appearing across the country, there is a sense the US will be embroiled in a battle against COVID-19 well into 2020 and most likely 2021 as appetite for social distancing and economic lockdown restrictions falter. Equity markets plunged as investors looked to withdraw profits, cashing in on the recent upturn. The S&P 500 fell over 5% while the Eurostoxx 600 fell 4.1% as risk assets and commodity currencies were dumped.
Key Movers
The AUD was the worst performer on the day falling 2% and slipping below 0.6850. Sterling fell 1% as reports it will engage in intensified free trade discussions with the EU, reminded investors Brexit still looms larger and the likelihood of a hard break increase as we move closer to the official divorce date.The question now is, was this merely a short-term correction following the upturn of the last fortnight or the beginnings of a broader shift in risk sentiment. Attentions today remain squarely affixed to the risk narrative.
Expected Ranges
- USD/CAD: 1.353 - 1.359 ▼
- GBP/USD: 1.252 - 1.253 ▲
- EUR/USD: 1.124 - 1.125 ▲