By Yasin Ebrahim.
Investing.com – The dollar rode the euro’s slide to a more than one-month high on Monday and appeared to reclaim its safe-haven status amid the global growth turmoil amid rising odds of Europe reimposing lockdown measures to curb the spread of Covid-19.
The , a measure of the dollar’s trade weighting against a basket of six major currencies, rose 0.80 percent to 93.69, the highest since Aug. 13.
“More restrictions are expected in the coming days and weeks, especially in Europe,” analysts at Deutsche Bank (DE:) said in a note on Monday.” The fact that the virus has spread fairly quickly is a big concern.”
European health ministers have already sounded the alarm over the impact of the second wave of the virus, with German Health Minister Jens Spahn reportedly warning on Monday of a possible spike in infections in Germany after the spread in France, Austria and the Netherlands.
In Britain, chief scientific adviser Patrick Vallance said that if the virus continues at its current rate, there could be 50,000 new infections a day by mid-October.
It fell 0.66 percent to $1.1759 and 0.89 percent to $1.2801.
However, ING said in a note that the dollar’s rally could prove short-lived, as Fed Chairman Jerome Powell is likely to reiterate the bank’s low-for-long rate environment in congressional testimony later this week.
“This should keep the dollar on the back foot, even if European data underperforms,” the bank added.” At the same time, this should prevent the dollar from staging a long rally, and we expect a benign bearish trend in the dollar to take shape again this week.”
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