Dollar gains as Covid, Treasury yields jump after beats economic data
Dollar holds ground as rising Covid-19 cases boost safe-haven demand
The dollar held gains against a basket of major currencies on Thursday as escalating coronavirus cases in Europe stoked investor fears that fresh lockdowns would further hit the already fragile economic recovery.
The safe-haven greenback steadied against a basket of six currencies at 93.94, up 0.6% on the day.
Concerns of further damage to the economy grew as France and Germany went back into lockdown on Wednesday, as a massive second wave of coronavirus cases threatened to overwhelm Europe.
The euro changed hands at $1.1657 per dollar. It dropped against the Japanese yen, last fetching 122 yen.
Traders also braced for volatility with the U.S. election less than a week away, while the country, like Europe, also faces an increase in coronavirus infections.
“While Biden is taking the lead, Trump has been catching up in some parts of swing states,” said Shinichiro Kadota, senior strategist at Barclays.
“There is certainly a possibility of a higher volatility in the market if it becomes a closer battle, involving risks such as full results not being released (on the election day),” he said.
Treasury yields jump after better-than-expected economic data
Treasury yields climbed on Thursday after economic data pointed to a continuing recovery.
The yield on the benchmark 10-year Treasury note gained 5 basis point to around 0.836%. While the yield on the 30-year Treasury bond also rose a similar amount to 1.627%. Yields move inversely to prices.
Reference: CNBC
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