SINGAPORE- The dollar found support on Monday, as surging coronavirus cases in Europe and the United States and a lack of progress toward a US stimulus package put traders in a cautious mood, although hopes for a Brexit trade deal held sterling steady.
Against a basket of currencies, the greenback trod water in the Asia session, after having fallen broadly last week. Against the risk-sensitive Australian dollar and against the euro it gained about 0.2 percent.
Sterling, however, held firm at $1.3024.
The United States has recorded its highest ever number of new COVID-19 cases for two consecutive days and so has France. Spain announced a new state of emergency and Italy has ordered restaurants and bars to shut by 6 p.m.
US House Speaker Nancy Pelosi said on Sunday that she expected a White House response on Monday regarding the latest stimulus spending plan, but there have been few tangible signs that a long-stalled deal is actually nearer.
“The combination of receding hopes for a pre-election fiscal deal and the news on COVID and potentially stricter lockdowns is enough to take a bite out of the stock market,” said Ray Attrill, head of FX strategy at National Australia Bank.
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