U.S. Dollar Higher On New Virus Strain Concerns
The U.S. dollar appreciated against its major counterparts in the European session on Monday, as concerns over border closures and tighter restrictions in the U.K. to contain the spread of a new strain of the coronavirus made investors cautious.
The British government on Saturday imposed tighter restrictions on south-east England, including London, amid virus crisis.
Fears intensified after Netherlands and Australia detected the emergence of the new variant found in the UK.
Canada joined Europe and Turkey to suspend flights from the U.K.
U.K. health officials said that the new Covid mutation is 70 percent more transmissible than other strains.
On the stimulus front, U.S. congressional leaders reached a deal on $900 billion coronavirus aid package.
Lawmakers will vote on the relief and funding bill today.
The greenback spiked up to 5-day highs of 103.89 against the yen and 1.2129 against the euro, after falling to 103.25 and 1.2235, respectively in early deals. The greenback is seen challenging resistance around 105.00 against the yen and 1.18 against the euro.
Reversing from its early low of 0.8840 against the franc and a 5-day low of 1.3441 against the pound, the greenback climbed to a 2-week high of 0.8919 and a 10-day high of 1.3188, respectively. The greenback may find resistance around 0.92 against the franc and 1.28 against the pound.
The greenback moved up to near a 3-week high of 1.2957 against the loonie, 10-day high of 0.7462 versus the aussie and near a 4-week high of 0.7002 against the kiwi, up from its early lows of 1.2784, 0.7606 and 0.7124, respectively. Next key resistance for the dollar is seen around 1.32 against the loonie, 0.73 versus the aussie and 0.68 against the kiwi.
Looking ahead, Canada new housing price index for November is due in the New York session.
Eurozone flash consumer sentiment index for December is set for release at 10:00 am ET.