The U.S. dollar was set for a weekly gain and the Australian dollar for a 1% drop this week as the threat of a second wave of coronavirus infections rattled investors.
As hopes faded for a quick global recovery from the pandemic, traders unloaded the trade-sensitive Aussie and moved into safer assets such as the U.S. dollar.
One key trigger for investor sentiment today was the flash estimate release of the Germany gross domestic product data. Economists polled by expect Europe’s largest economy to shrink by 2.2% in the first quarter, less than other euro zone states. This was exactly the outcome which was priced into the markets.
Elsewhere, the British pound remained under pressure, falling below $1.22, following the British government’s reiterating its refusal to extend the Brexit transition deadline beyond December.