TOKYO (Reuters) – The US dollar edged higher against major currencies on Wednesday amid fears of a second wave of coronavirus in Europe and the UK, while data from the US indicated economic recovery.
The Australian and New Zealand dollars sank amid expectations of the dovish policy of regulators.
The central bank of New Zealand on Wednesday, as expected, kept its key interest rate at a record low of 0.25% and signaled the possibility of further easing, warning of the need to help the economy to combat the effects of the pandemic.
The Australian dollar touched a six-week low. Westpac economist Bill Evans expects the Australian Central Bank to cut its key interest rate at its October 6 board meeting, he said Wednesday.
In the short term, green is likely to continue to rally as sentiment fluctuates in Europe over the spread of the coronavirus, but uncertainty over this year's US presidential election could cause even more volatility.
“The picture in Europe has completely changed as the economic recovery stalled and a second wave of the virus emerged, but I am also concerned about American politics,” said Masafumi Yamamoto, chief currency strategist at Mizuho Securities in Tokyo.
US home sales rose 2.4% in August from the previous month to 6.00 million at an annualized rate, the National Association of Realtors said.
The dollar index against a basket of six major currencies rose 0.15% to 94.129 by 8:45 am ET.
The Australian dollar fell 0.6% to $ 0.7131. The Kiwi dropped 0.35% to $ 0.6611.
The Japanese yen fell 0.17% against the dollar to hit 105.1 yen. The euro slipped 0.19% to $ 1.1684, while the pound sterling fell 0.06% to $ 1.2723.
(Stanley White, translated by Olga Devyatiarova. Editor Anna Kozlova)