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U.S. Dollar Appreciates As Virus Infections Rise

The U.S. dollar was higher against its major counterparts in the European session on Friday, as new restrictions in Europe due to a resurgence in Covid-19 cases dampened prospects of economic recovery.

A second wave of infections across Europe forced governments to reimpose drastic measures.

The U.K. reported the highest number of new coronavirus cases in a single day since the start of the pandemic.

France also reported a record number of Covid-19 cases, a day after the government announced new restrictions on bars and restaurants in major cities.

Spain’s cumulative tally of confirmed coronavirus infections passed 700,000 on Thursday.

Investors focus on stimulus talks in Washington as the Democrats are preparing a $2.2 trillion package amid indications of strain in financial markets.

Data from the Commerce Department showed that durable goods orders climbed much less than expected in the month of August.

The Commerce Department said durable goods orders rose by 0.4 percent in August after soaring by an upwardly revised 11.7 percent in July.

The greenback recovered from a 3-day low of 1.2806 against the pound and reached as high as 1.2694. The greenback may find resistance around the 1.25 level.

Data from the Office for National Statistics showed that the UK budget deficit widened to the highest on record in August due to lower income and government’s coronavirus relief schemes.

Public sector net borrowing excluding public sector banks, increased by GBP 30.5 billion from last year to GBP 35.9 billion in August.

The greenback rose back to 105.53 against the yen, heading to pierce a 10-day peak of 105.54 hit at 8:45 pm ET. If the greenback rallies again, it may find resistance around the 108.00 mark.

The USD/CHF pair hit 0.9286, its biggest level since July 23. On the upside, 0.96 is seen as its next likely resistance level.

The greenback bounced off from its early low of 1.1685 against the euro, with the pair trading at 1.1626. Next key resistance for the greenback is seen around the 1.14 mark.

Data from the European Central Bank showed that Eurozone money supply increased at a slower pace in August and credit to the private sector logged a steady growth.

The broad monetary aggregate M3 expanded 9.5 percent on a yearly basis, slower than the revised 10.1 percent increase seen in July. M3 was expected to grow 10.2 percent.

The U.S. currency recovered to 1.3391 versus the loonie, 0.7025 against the aussie and 0.6541 against the kiwi, off its prior low of 1.3328, 2-day lows of 0.7087 and 0.6592, respectively. The next possible resistance for the greenback is seen around 1.37 versus the loonie, 0.68 against the aussie and 0.63 against the kiwi.

The material has been provided by InstaForex Company – www.instaforex.com