Sterling rises as dollar rally fizzles
The British pound rose against most major currencies on Monday, as the US dollar continued to weaken and investors rushed to riskier currencies.
Several members of the Bank of England, led by Andrew Bailey, had issued warnings about the coronavirus impact on the British economy.
The BoE Governor Andrew Bailey warned of the coronavirus downside risks, adding that it is even a higher risk on the UK's economy than a no-deal Brexit scenario.
The numbers of coronavirus infections continued to rise in the UK, while several other European countries are facing the second wave of the disease.
The coronavirus infections rose to more than 33 million globally, with a death toll of more than 1 million victims.
GBP/USD rose 0.7% to 1.2831 as of 21:41 GMT, after the pair hit a high of 1.2922 and a low of 1.2745.
USD/JPY tilted lower in Asian trade off September 15 following earlier Japanese data and ahead of US data today. As of 07:11 GMT, USD/JPY fell 0.09% to 105.31, with a week high at 105.54. Earlier Japanese data showed services prices rose 0.1%, slowing down from 1.1% in July. From the US, durable goods orders are expected up 1.1%, slowing down from 11.4% in July, while core orders are expected up 1%. Federal Reserve Bank of New York President John Williams will speak about the COVID-19 job market at a webinar hosted by the University of Rochester. Chicago Fed President Charles Evans said that the US economic crisis is worse than it appears in the economic data, while other Federal Reserve's members expressed that the economy would recover from the pandemic by the end of this year. White House Chief Health Advisor Anthony Fauci expressed that an effective vaccine is being developed, adding that the US would have the vaccine by next November or December. At his Congressional testimony, Fed Chair Jerome Powell said over $195 billion of aid was given away to counter the Covid 19 impact. He called on Congress to issue further stimulus to help families and small and medium companies as recession continues to haunt the economy. US President Donald Trump has refused to commit to a peaceful transfer of power in case his opponent Joe Biden won the presidential elections in November.
The US dollar rose on Friday, to maintain above the 1-week low hit yesterday, to head for the first gain in 5 days, shining as the best alternative investment amid risk aversion after US President Donald Trump announced testing positive for the Coronavirus, ahead of the US jobs report for September. The dollar index rose over 0.3% to 94.03 points, after it opened at 93.73 points, and hit an intraday low of 93.71 points. The index lost 0.1% yesterday, posting its fourth straight daily loss, and hit a 1-week low of 93.53 points. Demand for the US dollar was renewed, as most global stocks fell on risk aversion, after the President of the United States announced he tested positive for Covid-19. US President Donald Trump tweeted that he and the first lady tested positive for Covid-19 and began quarantine and recovery process immediately Investors are anticipating the release of key data later today, as the non-farm employment change reading will be released at 12:30 GMT, with forecasts of the creation of 0.900 million new jobs in September vs. 1.371 million jobs in August, and the unemployment rate is expected to drop to 8.2% from 8.4%, while the average hourly earnings is expected to rise by 0.5% vs. 0.4%.
USD/JPY tilted higher in Asian trade off October 2 lows amid a lack of data from Japan and ahead of US data and Fed speeches today. As of 06:50 GMT, USD/JPY rose 0.09% to 105.53, with the highest since October 13 at 105.62. From the US, building permits are expected up to 1.52 million units in September, while Housing Starts are expected up to 1.45 million units. New York Fed Governor John Williams will talk today in a series of web seminars, with similar speeches other Fed officials on financial stability. Democrats and Republicans remain in a tug of war over Covid relief, with the World Health Organization reporting 39.95 million global coronavirus cases so far, with the death toll standing at 1.11 million.