Virus scare puts dollar near year’s highs as ECB looms

SourceZawya
SectorFinancial Markets
CountryMiddle east

SINGAPORE – The dollar stood on the verge of fresh year-to-date peaks on Wednesday, as jitters about surging virus infections buttressed gains built on higher interest rate expectations, with investors waiting on the European Central Bank for their next cue. The euro touched its lowest since April on Tuesday and, at $1.1772 in Asia, was not far above the year’s nadir at $1.1704. It might find support if the ECB fails to meet expectations for a dovish tweak to rates guidance at its Thursday meeting.

But if that is delivered, it could open the way for further weakness. “The implication is the ECB’s monetary policy will now remain ultra easy for even longer which is a headwind to the euro,” said Commonwealth Bank of Australia strategist Kim Mundy. Other majors likewise faced difficulty escaping multi-month lows leaving sterling, the Canadian, Australia and New Zealand dollars to trade under pressure in the Asia session. “The U.S. dollar does seem to have...read more...