Analysts: COVID-19 Remains a Key Factor Affecting Major Currencies

Analysts evaluating the events in the currency markets remarked that the coronavirus or COVID-19 global healthcare crisis is still a dominant factor influencing the world’s major currencies nowadays. Their perspectives come as countries impose fresh restrictions again to curb the latest outbreaks.

We find this new forex report significant for our readers to learn about. We agree that the COVID-19 crisis is still underway, and new variants are materializing in other parts of the globe despite the vaccination roll-outs happening.

We advise our readers to stay updated and learn about this current news detailing the latest developments regarding the major currencies as it can impact their forex trading activities this week. Rodrigo Catril spoke on National Australia Bank’s morning podcast.

The financial firm’s senior currency strategist cited that the market is truly trading on the uncertainty in the air around coronavirus or COVID-19 pandemic. Catril affirmed that the international healthcare dilemma is the primary factor affecting the global markets.

He also said that a surprise fall in the US consumer sentiment had left investors feeling unsettled. The coronavirus crisis will likely remain a concentration for investors until then.

This development comes as no important economic data is due until the release of the US manufacturing and services purchasing managers’ indexes this coming Friday, July 23. During today’s morning trading session in Asia, the US dollar was up and stayed close to its highest levels in months.

Additionally, the US Dollar Index, which tracks a basket of other currencies against the greenback, increased 0.02 percent to 92.707 during noontime in the continent. Investors turned to the safe-haven US dollar as COVID-19 cases carry on rising internationally, in turn prompting concerns about the worldwide economic recovery.

Meanwhile, the risk currency Australian dollar plummeted to its lowest level against the US dollar since 2021, based on the news posted online by finance and business news outlet Yahoo! Finance. The Australian Dollar/US Dollar pair was down 0.22 percent to US$0.7386.

This event took place as the Asian trading session happened today, with the Australian dollar hitting a five-month low versus the safe-haven Japanese yen. Nations like South Korea and Australia have reimposed restrictive measures to control the latest COVID-19 outbreaks.

In Japan, reports of the first COVID-19 cases were in the Olympic Village, ahead of the Tokyo Olympic Games’ commencement on Friday. For the first time since May 2021, the seven-day international average of daily new COVID-19 cases is more than half a million.

The US Dollar/Japanese Yen pair edged down 0.15 percent to 109.91 yen. As for England, it is set to lift most of its COVID-19 restrictive measures today, popularly referred to as “Freedom Day.”

In light of this event, the pound sterling was at its lowest level in over a week. The pound sterling/US Dollar pair inched down 0.09 percent to 0.73 pence.

The case numbers in the United Kingdom have spiked lately, despite hopes pinned on the country’s COVID-19 vaccination drive. ANZ Bank analysts issued a warning on the UK’s “Freedom Day” today, citing the case of the Netherlands.

They said that the European country relaxed all restrictions yet saw cases increase from 500 to 10,000 per day in two weeks. The ANZ Bank analysts added that the Dutch government then needed to reverse course and is awaiting nervously to see what happens to hospitalizations.

We believe in the analysts’ viewpoint regarding COVID-19. We have observed that the foreign exchange rates involving the world’s major currencies continue to fluctuate nowadays amid the pandemic.

We advise our readers to follow their governments’ orders. If the events in the currency markets adversely impact them, we recommend they wait for new developments.  If the foreign exchange trading climate gets better, we suggest they carry on trading and be in a wait-and-see position for the time being if otherwise.

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