Best MT5 broker in IndiaCommodity BrokerECN BrokerForex AnalysesStock BrokerTechnical Analysis

Dollar and Yen supported as coronavirus fears weigh on mood

By Administrator_India,

Capital Sands.

The U.S. dollar and Japanese yen were in demand on Tuesday, along with the bonds of both countries, as worries about the spread of coronavirus had investors heading for safe harbors.

The World Health Organization said overnight that the spread of cases among people who have not been to China could be “the spark that becomes a bigger fire”.

Coronavirus has killed 1,016 people in mainland China, Chinese health officials said on Monday, though they also reported a drop in the number of daily new cases.

The dollar, seen as a safe haven owing to its position as the world’s reserve currency, stood by a four month high against the euro at $1.0910. Against a euro-heavy basket of currencies it also stood at a four month high of 98.832.

The greenback touched a three-month high of $0.6378 per New Zealand dollar , and at $0.6686 per Aussie dollar was not far above the decade peak of $0.6657 hit on Monday .

“It’s been helped out by a lot of things,”

“The coronavirus hitting has money going into the U.S. dollar,” he said. “You’ve seen a good run of economic data in the U.S., that’s been another support … the vulnerable ones are the commodity countries like Australia and New Zealand.”

China’s central bank has moved to support the economy by cutting interest rates and flushing the market with liquidity. But with the extent of spread and its impact still unknown, investors have dumped currencies exposed to China for dollars and yen.

That left the yen fairly stable against the dollar – it last sat at 109.75 yen per dollar – but gaining steadily on other Asian currencies. Trading was subdued with Japanese markets closed for a holiday.

The Australian and New Zealand dollars have dropped more than 4% on the yen this year. The Singapore dollar has lost 3% in as many weeks.

U.S. Treasury and Japanese government bond prices have steadily climbed this year.

“The risk of a larger downgrade in Chinese GDP growth as a whole is gaining momentum,” said Richard Grace, chief currency strategist at Commonwealth Bank.

“With China’s economy accounting for some 17% of world GDP, but accounting for a significant contribution to growth in the global economy, the risk of a larger downgrade to global growth is clear,” he said.

“Upside in AUD/USD is limited, and downside risks continue to mount.”

Related posts
Forex Analyses

Dollar Slips From One-Month High Ahead of Fed Statement

By Administrator_ India Capital Sands The dollar edged marginally lower in early European trade…
Read more
Forex Analyses

Dollar Down Over Higher-Than-Expected Inflation Data

By Administrator_ India Capital Sands The dollar was down on Friday morning in Asia after the U.S.
Read more
Forex Analyses

Bitcoin under pressure as comeback fades

By Administrator_ India Capital Sands Bitcoin fell 3% on Friday, giving up gains from the Asia…
Read more
Become a Trendsetter
Sign up for Davenport’s Daily Digest and get the best of Davenport, tailored for you. [mc4wp_form id="729"]

Leave a Reply

Your email address will not be published. Required fields are marked *