US dollarThe dollar was up on Tuesday morning, with U.S. Treasury yields and fears of a second wave of COVID-19 cases increasing investor demand for dollars.
Safe-haven appeal boosted the dollar against its major peers as investors adjusted their risk expectations with an eye on warnings of a second wave of COVID-19 infections as more countries eased lockdown restrictions. Against the Japanese yen, the dollar was 0.93% higher at 107.64 yen. The euro was down 0.26% against the dollar at $1.0812.
The S&P 500 closed slightly higher as investors looked beyond new spikes in coronavirus infections to focus on expectations that an economy crippled by mandated shutdowns will soon be re-opened for business. While the Dow was nominally lower, technology shares boosted the Nasdaq.
The Dow Jones Industrial Average fell 0.45% to 24,221.99, the S&P 500 gained 0.01% to 2,930.19 and the Nasdaq Composite added 0.78% to 9,192.34. Traders pushed Treasury yields higher as they anticipated new government securities being issued to pay for massive stimulus efforts to prop up the economy amid the COVID-19 pandemic.
Oil prices fell as investors worried about a second wave of coronavirus infections, but new output cuts from Saudi Arabia tempered worries about oversupply and limited price losses. Brent crude futures fell 2.74% to $30.12 a barrel. U.S. West Texas Intermediate crude was 0.04% lower at $24.73 a barrel.
Gold prices retreated as the dollar benefited from safe haven buying driven by fears over a second wave of coronavirus infections.
News regarding COVID-19 and the re-new US-China trade tussle will possibly keep driving near-term moves. Later during the early North American session, the U.S. Labour Department’s inflation data at 12:30 GMT will shed light on the impact of COVID-19 on the country’s consumer prices. Consumer price index (CPI) is expected to have dropped 0.8% in April, following a 0.4% fall in March.
Fed speakers will be among the key things on the agenda today as well, and the message yesterday was rather clear i.e. they will be pushing back against negative rates for now.