US dollar loses in uncertain market
US dollar edged noticeably lower during early European trading on May 12. The correction comes after the currency has hit the highest mark in the last two weeks.
By 06:55 GMT the US Dollar Index was at 100.248, remaining mostly flat after getting to 100.513 earlier. EUR/USD gained 0.1%, reaching 1.0817. Earlier it dropped under US1.0800 for the first time in a week. GBP/USD lost 0.1% and reached 1.2323. USD/JPY lost 0.1%, reaching 107.55.
Five new cases were reported in Wuhan, where the pandemic reportedly originated, on May 11. The news makes the public doubtful about the easing of the containment measures. Quarantine in Wuhan has only recently been relaxed.
Now investors have to weigh the optimistic stimuli of economic reopenings around the world against the risk of the pandemic coming back in full force. According to the Robert Koch Institute’s data, the virus is spreading again.
The US dollar has also been impacted by a sharpening US yield curve. Federal Reserve spoke against the possibility of introducing negative interest rates, proclaiming that it would be a “problematic” step.
Meanwhile the Australian dollar suffered heavy losses on May 12. The currency lost earlier gains after China temporarily stopped meat imports from Australia. It caused concerns about worsening relations between the two countries.