· US dollar slides to two-week low
The dollar dropped to two-week lows on Wednesday, showing reduced safe-haven appeal for now, as U.S. tech stocks rallied and commodity prices firmed, even as sentiment remained cautious amid a resurgence of new coronavirus cases globally, particularly in the United States.
The euro, meanwhile, rose to three-week highs against the dollar, while commodity currencies such as the Australian, New Zealand, and Canadian dollars gained.
Against a basket of its rivals, the dollar dropped 0.5% to 96.448 in early afternoon trading.
A decline in the dollar earlier this week set off the so-called “Death Cross,” a bearish technical formation that occurs when the 50-day moving average crosses below the 200-day moving average.
Past occurrences of the Death Cross have been followed by dollar weakness eight out of nine times since 1980 when the 200-day moving average has been declining, as it is now, analysts at BofA Securities said.
The euro rose 0.6% versus the dollar to $1.1338.
Against the safe-haven yen, the dollar was down on the day at 107.25 yen. The greenback was also 0.5% lower versus the Swiss franc at 0.9381 franc.
Sterling shrugged off earlier losses and rose 0.6% to $1.2588, after British finance minister Rishi Sunak promised 30 billion pounds ($37.7 billion) to head off an unemployment crisis by paying companies to bring back furloughed workers and cutting taxes for hospitality firms and homebuyers.
· Coronavirus live updates:
Ø Global cases: More than 12,153,559
Ø Global deaths: At least 551,154
Ø U.S. cases: More than 3,156,997
Ø U.S. deaths: At least 134,829
The U.S. reported another record single-day spike in new cases as outbreaks continue to rage in hot spots across the country, particularly in the South and West. Even as daily new cases continue to accelerate and the country surpasses 3 million total cases, President Donald Trump is pushing for schools across the country to reopen in the fall.
- California ramps up hospital capacity as coronavirus cases surge
California Gov. Gavin Newsom announced during his news briefing that the state now has healthcare capacity to treat 50,000 Covid-19 patients as it continues to see a surge in daily number of cases and hospitalizations.
Newsom also announced that the number of hospitalizations due to Covid-19 is increasing. Over the last two weeks, California has seen a 44% increase in hospitalizations and 34% increase in intensive care unit (ICU) admissions.
- Covid-19 cases increase for younger Californians
In California, confirmed cases more than doubled in the last month, according to data from John Hopkins University with about two-thirds of California’s new infections among people ages 18 to 49, CNBC’s John Schoen reports. In March, only about half of California’s infections were in this younger age group.
· Fed’s Bullard sees unemployment falling to as low as 7% this year
St. Louis Federal Reserve President James Bullard expressed optimism in the pace of the U.S. economic recovery, saying the unemployment rate could fall substantially by the end of the year.
With the current jobless level at a post-World War II high 11.1%, Bullard told CNBC that he could see a rate as low as 7% in a few months.
“I think we’re tracking very well right now,” the central bank official said during a “Closing Bell” interview. “Seems to me like by the end of the year you can get down certainly to single digits, probably even below 8%, maybe 7% by the end of the year.”
That would mark quite a run for unemployment, which was at a 50-year low 3.5% just five months ago before spiking up to 14.7% in April and coming down to its current level in June.
· Oil dips as U.S. inventory build stokes supply fears
Oil prices eased in early trade on Wednesday as industry data showing a build in U.S. crude stockpiles and a forecast for U.S. crude output to fall less than anticipated in 2020 added to worries about oversupply.
Brent crude futures fell 13 cents, or 0.3%, to $42.95 a barrel by 0019 GMT. U.S. West Texas Intermediate (WTI) crude futures dropped 10 cents, or 0.3%, to $40.52 a barrel.
Prices were little changed in the previous session and have been held in a narrow band over the past two weeks as concerns about a spike in coronavirus cases globally tempers optimism about a recovery in fuel demand.
Reference: CNBC, Reuters, Worldometers
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