· U.S. dollar slides as vaccine news offsets surge in virus cases
The dollar slipped on Friday, as its safe-haven allure diminished, on hopes of a potential vaccine for the novel coronavirus that outweighed concerns about the surge in infections in the United States and around the world.
The U.S. currency posted its largest weekly percentage loss against a basket of major currencies in a month.
On Friday, Gilead Sciences Inc (GILD.O) said additional data from a late-stage study showed its antiviral remdesivir reduced the risk of death and significantly improved the conditions of severely ill COVID-19 patients.
That helped a rally in U.S. stocks and pushed the dollar lower.
More than 60,500 new COVID-19 infections were reported across the United States on Thursday, according to a Reuters tally, the largest one-day increase in any country since the pandemic emerged in China last year.
But analysts said currency investors may be looking forward to the treatments being developed for the virus.
In late afternoon trading, the dollar index fell 0.2% to 96.624 =USD.
The dollar also slid after U.S. producer prices unexpectedly fell 0.2% in June, following a 0.4% rebound in May, as the economy battles depressed demand amid the COVID-19 pandemic.
Reflecting the market's increased risk appetite, the euro, rose 0.2% against the dollar to $1.1300 EUR=EBS, while the British pound was up 0.1% at $1.2631 GBP=D3.
The dollar also fell to a two-week low against the safe-haven yen. It was last down 0.3% at 106.92 yen JPY=EBS.
The yen has been trading in a narrow range despite the ebbs and flows of risk sentiment, as one-month implied and historical volatility close to its record low. But, according to Monex, technical indicators in the options market are signalling investor concerns about future outbreak in volatility.
The Chinese yuan in the offshore market, meanwhile, was down about 0.2% at 7.0114 per U.S. dollar CNH=EBS, having touched a near-four-month high of 6.9808 on Thursday.
The Chinese currency has gained almost 1% this week, supported by hopes of capital inflows as share prices rebounded after Beijing indicated it wants a healthy bull market.
· Florida reports more than 15,000 new coronavirus cases, shattering record
Florida on Sunday reported 15,299 confirmed coronavirus cases, the highest single day total of any U.S. state since the pandemic hit the nation, including New York at the peak of its outbreak.
The surge in infections brings Florida’s total cases to 269,811, higher than the totals of several major nations with much larger populations such as Spain, Italy and France among others. Those countries, like New York state, passed the peak of their outbreaks months ago while virus transmission in Florida has escalated after a relatively quiet spring.
· Trump says U.S.-China relationship is ‘severely damaged,’ phase 2 trade deal not a priority
President Donald Trump said Friday that he isn’t thinking about a possible next stage of the U.S. trade deal with China, adding that the relationship between the two nations has been “severely damaged” by the coronavirus pandemic.
“They could have stopped the plague. They could have stopped it. They didn’t stop it,” Trump said on Air Force One en route to Florida, according to reporters present on the plane.
Asked if that friction meant “phase two” of the U.S.-China trade deal would no longer happen, Trump said he wasn’t even thinking about it and that he had many other things on his mind.
· U.S. weighs limited options to deal with China over Hong Kong: WSJ
The United States is weighing restricted options to deal with China over its recent moves in Hong Kong, the Wall Street Journal reported on Sunday, as tensions between Washington and Beijing heat up.
Steps against Hong Kong's financial system risk hurting U.S., Western and Hong Kong companies and consumers, according to the report here, citing U.S. officials and analysts.
Measures like more targeted sanctions against Chinese officials and trade moves against products made in Hong Kong would have little impact on Beijing’s integration of the city into the mainland’s political and security system, the Journal added.
· Oil rises as International Energy Agency boosts demand forecast
Oil prices climbed more than 2% on Friday after the International Energy Agency (IEA) bumped up its 2020 demand forecast but record-breaking new coronavirus cases in the United States tempered expectations for a fast recovery in fuel consumption.
Prices also found support after data showed U.S. energy firms cut the number of oil and natural gas rigs operating to a record low for a 10th week in a row.
Brent crude LCOc1 settled up 89 cents, or 2%, at $43.24 a barrel and U.S. oil CLc1 settled up 93 cents, or 2.4%, at $40.55 a barrel.
A strong stock market also boosted oil prices. A slate of economic data, including a record monthly payrolls addition, pointed to a revival in U.S. business activity in June.
U.S. crude was little changed on the week while Brent notched a weekly gain of about 1%.
The Paris-based IEA raised its demand forecast to 92.1 million barrels per day (bpd), up 400,000 bpd from its outlook last month.
Reference: CNBC, Reuters
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