US COVID-19 Cases: Confidence Towards DXY At Cost

US COVID-19 Cases:
Confidence Towards DXY At Cost  

The dollar index (DXY) extended its losses for a third
week in a row following the continuous sell-off pressure amid a lack of
confidence towards the world’s ‘strongest’ economy. The number of COVID-19
cases continues to spike gradually, with total cases now more 13M, while the US
alone contributed to more than 3M of the total figure. Although cases in early
affected countries such as Europe and China are declining, the US alone reports
more than 50K cases a day.

With the number of new cases surging in the US,
investors are losing confidence towards the country in terms of their recovery
from the pandemic’s impact. Furthermore, countermeasures are not being taken
seriously, with no restriction or order being brought up to contain the virus
from spreading further. Countries that were able to minimize the spread of the
virus are starting to resume their economic activity at great capacity. The
difference led to a boost in investors’ risk appetite despite the ongoing
pandemic.

With all the negative bias towards the dollar aside,
the DXY continues to hold steady above its weekly 200-MA, denying further
downward movement below the 96.00 handle. One argument stands as there are
still investors who are more sceptical during times of a global recession and a
pandemic such as the Coronavirus. With no vaccine up-to-date, the market is
still restless from the uncertainties ahead.

On the other hand, the DXY still possesses its
safe-haven properties, especially with risks lingering in the market such as
the US-China trade war, Brexit, and the upcoming US Presidential election in
November. With the market remaining in a highly uncertain situation requiring
fundamental support, investors will focus on this economic data-packed week to
gauge market sentiment.

Up ahead, the European Central Bank & Bank Of
Canada will be holding their monetary policy meetings followed by the press
conference led by respective central bank’s governors. Furthermore, investors
can also focus on the employment data from Australia and the UK and US Core CPI
and Retail Sales data.