The greenback capitalized on massive risk aversion at the start of the week and retains a bullish bias on Tuesday
US stocks fell on Monday, though pared its losses by the end of the day. The plunge was due to a widespread sell-off in global stock on worries about the pandemic’s economic pain. The S&P 500 fell 1.2%, extending its losing streak to four days. The Dow Jones Industrial Average lost 1.8%, and the Nasdaq Composite slipped 0.1% after recovering from a 2.5% drop.
Today in Asia, the selling pressure persisted amid the lingering virus fears and concerns about fresh lockdowns while issues in the banking sector added to the negative pressure in the markets. Hong Kong’s Hang Seng lost 0.97%, the Kospi in South Korea sank 2.37%, the S&P/ASX 200 in Australia lost 0.66% and the Shanghai Composite index 1.28% lower. Tokyo’s markets were closed for a national holiday.
In Europe, equities opened marginally higher after their worst session in more than three months. Rising cases of coronavirus and tighter economic restrictions will likely prevent regional stocks from a more sustainable recovery in the short term, with the overall investor sentiment remaining cautious. Later today, Federal Reserve Chairman Jerome Powell will appear in front of a House committee.
Meanwhile, the greenback capitalized on massive risk aversion at the start of the week and retains a bullish bias on Tuesday. In recent trading, GBPUSD dropped to two-month lows marginally above 1.27 where the 100- and 200-DMAs acted as support and triggered a local bounce. However, the pair remains in the red on the daily charts, as the cable is pressured by a risk-off tone coupled with the ongoing Brexit woes. The BoE Governor Andrew Bailey said that the UK economic recovery has been quite rapid and substantial. However, the pair was nearly unaffected by these comments as traders were focused on negative developments surrounding the pandemic and Brexit.
Elsewhere, bitcoin keeps grinding lower after a rejection from the $11,100 region seen last week. BTCUSD is now stuck between the 20- and 100-DMAs, deriving support from the $10,300 area. As long as the prices stay above the $10,000 psychological level, downside risks are limited.