US Dollar Soars as Equities Slid on Virus Concerns
US dollar soared sharply on Friday as traders have started moving towards safe-haven assets after the European region has been witnessing the massive growth in virus infections.
The virus infections also grew in the United States while the World Health Organization claims that virus infections could increase sharply this winter if people avoid social distancing policies.
European countries have announced new business and economic restrictions along with curfews in the hard-hit areas like Paris.
Slowing Economic Activity could Support US Dollar
Besides increasing virus infections, investors are showing concerns over slowing business activities. US weekly jobless claims jumped to 898,000 last week, representing a growth of 53,000 compared to the past year period. The economists were expecting jobless claims around 825,000. The jobless claims could rise further in the days ahead if the government introduces new economic restrictions to control the virus spread.
New York manufacturing activity slowed compared to the previous months. The Manufacturing Index readings fell to 10.5 this month from a reading of 17.0 in the previous month. The readings also fell sharply from analysts’ expectations for the 12.3 level.
Economic activities could drop further in the days ahead as the US government has delayed the stimulus package that is supposed to help small and struggling businesses to get out of the worst economic situation.
Risker Currencies and Equities Fell
Equities all around the globe posted losses in the past few sessions due to concerns over increasing virus infections. US stock indices have generated losses in the past three straight sessions.
Riskier currencies including the euro and Australian dollar are struggling against the US dollar. The USD index, which tracks the US dollar against the basket of six currencies, jumped to 93.80 level on Friday. Meanwhile, the euro plunged to around $1.16 level and the Australian dollar has hit two weeks low against the US dollar.