ANL 34.00 Increased By ▲ 0.90 (2.72%)
ASC 14.90 Increased By ▲ 0.55 (3.83%)
ASL 25.10 Increased By ▲ 0.62 (2.53%)
AVN 92.20 Decreased By ▼ -0.30 (-0.32%)
BOP 9.14 Increased By ▲ 0.08 (0.88%)
BYCO 9.85 Increased By ▲ 0.15 (1.55%)
DGKC 134.70 Increased By ▲ 2.51 (1.9%)
EPCL 50.62 Increased By ▲ 0.52 (1.04%)
FCCL 24.63 Increased By ▲ 0.33 (1.36%)
FFBL 25.86 Increased By ▲ 1.46 (5.98%)
FFL 15.49 Increased By ▲ 0.47 (3.13%)
HASCOL 10.56 No Change ▼ 0.00 (0%)
HUBC 86.33 Increased By ▲ 1.23 (1.45%)
HUMNL 7.02 Increased By ▲ 0.27 (4%)
JSCL 25.65 Increased By ▲ 0.40 (1.58%)
KAPCO 41.55 Increased By ▲ 2.80 (7.23%)
KEL 4.02 Increased By ▲ 0.04 (1.01%)
LOTCHEM 14.45 Increased By ▲ 0.02 (0.14%)
MLCF 46.42 Increased By ▲ 0.54 (1.18%)
PAEL 37.25 Increased By ▲ 0.55 (1.5%)
PIBTL 11.70 Increased By ▲ 0.27 (2.36%)
POWER 10.25 Increased By ▲ 0.10 (0.99%)
PPL 90.90 Increased By ▲ 1.20 (1.34%)
PRL 26.86 Increased By ▲ 0.61 (2.32%)
PTC 8.71 Increased By ▲ 0.11 (1.28%)
SILK 1.35 No Change ▼ 0.00 (0%)
SNGP 42.71 Increased By ▲ 1.31 (3.16%)
TRG 146.10 Increased By ▲ 3.00 (2.1%)
UNITY 30.20 Increased By ▲ 0.41 (1.38%)
WTL 1.41 Decreased By ▼ -0.01 (-0.7%)
BR100 4,965 Increased By ▲ 76.98 (1.57%)
BR30 25,754 Increased By ▲ 477.72 (1.89%)
KSE100 45,837 Increased By ▲ 558.82 (1.23%)
KSE30 19,174 Increased By ▲ 275.54 (1.46%)
Markets

Dollar edges up as overnight optimism proves short-lived; euro falls

The euro has fallen nearly 2pc against the dollar already this month, facing its biggest monthly fall since July la
17 Apr 2020
  • The euro has fallen nearly 2pc against the dollar already this month, facing its biggest monthly fall since July last year.
  • Sentiment was boosted overnight by a media report detailing encouraging partial data from experimental drug trials on severe COVID-19 patients at the University of Chicago.

LONDON: The dollar rose slightly Friday, after an overnight boost to risk sentiment quickly lost momentum and investors returned to a cautious stance about the economic impact of the coronavirus pandemic and lockdown measures.

Sentiment was boosted overnight by a media report detailing encouraging partial data from experimental drug trials on severe COVID-19 patients at the University of Chicago. More data is expected at the end of the month.

News of US President Donald Trump's plans to reopen the world's largest economy was also taken by investors as a positive sign, even after Thursday's jobless data showed a record 22 million Americans sought unemployment benefits in the last month.

The overnight moves toppled the dollar, which has closely tracked risk sentiment through the coronavirus crisis, from a week high, but the rebound proved short-lived with the dollar edging back towards its one-week high, up as much as 0.3pc by 10.30 GMT.

The safe-haven yen recovered somewhat to $107.76 but the riskier New Zealand dollar and Australian dollar held on to their earlier gains, with the New Zealand dollar up 0.9pc versus the US dollar.

Though the greenback is headed for its smallest weekly change in almost two months, it is likely to be supported in the short term as any vaccine will take months to come to market while the economic costs from months-long lockdowns in the global economy is going to be huge.

"Optimism stemming from hope of lockdown reversals seems perhaps premature," said Derek Halpenny, head of research for global markets EMEA at MUFG.

Furthermore, the coronavirus-related demand destruction in oil markets has the potential to broaden out into a risk-off mood in other asset markets if it continues, Halpenny said.  As the dollar regained its strength, the euro touched a 10-day low at $1.0812.

The euro has fallen nearly 2pc against the dollar already this month, facing its biggest monthly fall since July last year, after hitting its lowest against the Swiss franc in almost five years earlier this week..

With France's President Emmanuel Macron warning that the European Union could collapse unless it finds a way to share the costs of the crisis, the coronavirus has exposed the vulnerability of the single currency.

"EUR's status might have been evolving since the Covid-19 outbreak but, going forward, we are bearish. This is because we expect European data to decouple further from US data, and that is partly due to the lack of a coordinated European fiscal response - which we remain concerned about," wrote Bank of America strategists in a note to clients.