Fundamental Comment

Dollar grabs haven demand amid Covid-19 uncertainity

Dollar grabs haven demand amid Covid-19 uncertainity

The dollar index rose for a second straight session on Wednesday, recording its highest level in almost a week, with the return of demand on the federal currency as a safe haven in the market. 

The dollar index, which measures the performance of the dollar versus six major currencies, has hit the highest level at 96.66 after opening the day at 93.54. 

Pessimistic news about Covid-19 has caused worries in markets, denting risk sentiment, U.S. pharmaceutical Eli Lilly and Company had suspended clinical trials on antibodies treatment because of potential concerns about safety, less than a day after Johnson & Johnson's temporary halted Covid-19 vaccine trials. 

The Corona virus continues to dominate financial markets, with the rising infections the European region that resulted in many countries expanding restrictions and procedures to control the spread of the pandemic. 

The good thing for stock market so far is that they did not incur strong losses like the ones recorded during the first corona wave, as the focus remains on the upcoming U.S. Presidential election and corporate earnings results. 

On the other hand, gold prices are witnessing some fluctuation amid risk on and risk off mode encountering markets over nearly the past three weeks. 

After two sessions of decline, gold prices rebounded on Wednesday after managing to climb above $1900 an ounce, following its closing at $1890 levels on Tuesday.

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