USD rises as coronavirus infections increase in the US
The US dollar index continued to rise as investors reacted to the surging coronavirus cases in the United States. According to health officials, the number of new infections rose by 38,000 on Tuesday. That was after the infections rose by 31,000 on Monday. Worse, the number of new infections has been rising in more than 20 states. The most affected are California, Texas, Florida, and Arizona. Similarly, the number of new infections has been rising in countries like Germany, China, Japan, and South Africa. As a result, most investors are moving to the safety of the US dollar.
The greenback is also reacting to the latest economic data from the United States. According to the statistics office, the economy contracted by 5.0% in the first quarter after growing by 2.1% in the fourth quarter. Corporate profits fell by 12.4% while core personal expenditure increased by 1.6% in the quarter. Another number showed that durable goods orders rose by 15.8% in May after falling by a record 17.7% in the previous month. More so, the core durable goods order numbers rose by 4%. Meanwhile, more than 1.48 million Americans filed for jobless claims in the previous week.
The New Zealand dollar declined against the US dollar and gained against the Aussie. The decline happened even after New Zealand released upbeat trade numbers. According to the statistics office, the country’s exports increased from the previous $5.29 billion to more than $5.39 billion. In the same month, imports rose from the previous $3.95 billion to $4.14 billion. This led to a trade surplus of more than $1.25 billion. This number came a day after the RBNZ delivered its interest rate decision.
The EUR/USD pair declined to an intraday low of 1.1187, which is its lowest since June 22. On the four-hour chart, the price is slightly below the 50-day and 100-day exponential moving averages. The RSI has declined to the current 36 while the signal and histogram of the MACD has moved lower. Therefore, there is a possibility that the pair will continue falling as bears target the 38.2% Fibonacci retracement level at 1.1160.
The NZD/USD pair declined to an intraday low of 0.6400, which is lower than this month’s high of 0.6586. On the four-hour chart, the price is below the 50-day and 100-day exponential moving averages. It is also slightly above the important support at 0.6380. The Average True Range, which is an important measure of volatility has been falling. In the near term, the pair is likely to continue dropping as bears target 0.6380.
The XBR/USD pair dropped today as traders reflected on the rising coronavirus cases. The pair is trading at 39.88, which is the lowest it has been since June 17. On the daily chart, the price is below the ascending white trendline and above the 50-day and 100-day exponential moving averages. The RSI has also started falling. Therefore, the pair may continue dropping as bears attempt to move below the 38.2% retracement level at 38.71.