Coronavirus Restrictions in Asia Helped U.S. Dollar

Coronavirus Restrictions in Asia Helped U.S. Dollar

On Monday, the dollar benefited from renewed worries about coronavirus restrictions in Asia. But the situation is quite complicated, as inventors are heavily positioned for it to decline while the U.S. Federal Reserve keeps rates low.

Easing commodity prices as well as virus outbreaks in Singapore and Taiwan helped the greenback to reach modest gains. It rose 0.3% against the Australian dollar and 0.4% versus the New Zealand dollar.

The world’s reserve currency was little changed against the euro and the yen. Nonetheless, it remains close to testing main support levels, which if broken could see a return to a downtrend that pressed it lower through April.

A dollar bounce that followed higher-than-expected inflation data also faded as traders figure the Fed will keep rates low.

Dollar, euro, and other main currencies

The greenback last traded at $1.2135 per euro and has support around $1.2179. The situation is different in the case of the dollar index. At 90.367 it is just above key support at 89.677 and 89.206. It bought 109.32 yen as well as traded at $0.7759 per Aussie and $0.7223 per kiwi.

Fed minutes from an April meeting are due on Wednesday. Investors and analysts are monitoring the next market focus for clues on the Federal Reserve’s meeting. Analysts expect the Fed minutes to reiterate that the country’s central bank considers the pick up in inflation to be transitory. They do not expect the Federal Reserve to reduce its asset purchases in the near future.

Speculators increased their bets against the greenback last week, mostly by adding bets on the euro. They also added bets on the pound but to a lesser extent.


The British pound was close to a two-and-a-half-month high on May 17, at $1.4088. The country reopened its economy after a four-month COVID lockdown. The government’s decision to reopen the economy helped the pound to strengthen its position on Monday.


Things are traveling in the opposite direction in Asia where some countries have to deal with new outbreaks. Taiwan and Singapore made the decision to impose restrictions due to the number of Covid-19 cases in both countries. Currencies in both countries fell, the Taiwan dollar dropped to a three-week low on Monday due to restrictions.


The onshore yuan was little changed at 6.4361 per dollar following a mixed round of economic data. China’s industrial output slowed and retail sales missed expectations in April.

  • Support
  • Platform
  • Spreads
  • Trading Instument

For more news updates, visit our homepage now and see our latest news article. Want to learn more about trading? Visit our education page now and learn for FREE!


Leave a Reply