Shaky start to the week for Asian stocks as fresh surge in COVID cases sees Dollar strengthen
The relentless spread of the coronavirus saw Asian markets get off to a shaky start Monday, and has yet again made some investors question their optimism on the global economy, benefiting both safe harbour bonds and the U.S. dollar.
Japan’s Nikkei slumped 1.5% and South Korean stocks 1.4% while E-Mini Futures for the S&P 500 lost 0.3%.
Wall Street appeared to be hesitant on Friday as a host of states across the U.S had a change of heart over their reopening plans.
As of Sunday evening, the global death toll from the COVID-19 Pandemic hit half a million, with a quarter of those coming directly from the U.S, and now with fresh cases surging across some of the country’s southern states such as Texas and Florida leading the way.
While the increase in COVID infection rates has dented momentum across the markets, it has been speculated that most strategists still remain optimistic and recommend to buy not only on dips but also selectivity.
The U.S Dollar however has remained resilient and rose to an impressive 97.461 against a host of currencies from a trough of 95.714 earlier in the month.
It was a shade higher on the Yen at 107.20 earlier today, but well within the recent range of 106.06 to 107.63, the Euro stood at $1.1222 after finding solid support at $1.1167.
An important week lays ahead for U.S Data with the Institute for Supply Management ( ISM ) Wednesday and payrolls on Thursday ahead of the Independence holiday at the weekend, with Federal Reserve chairman Jerome Powell also testifying on Tuesday.
