The Chinese yuan climbed up on Wednesday, after falling to a month-low 7.0885 per dollar. A few days ago, the U.S. President Donald Trump declared that China is guilty of the coronavirus outbreak. His comments included a threat of fresh tariffs on Chinese goods. Investors are awaiting a response from Beijing and avoiding sharp moves.
Meanwhile, the Australian dollar traded at $0.6432 and the New Zealand dollar at $0.6052. Both of them were steady against the greenback, above 64 cents and 60 cents, respectively.
The sterling was also steady at $1.2431. On the other hand, the euro plummeted down to a one-week low of $1.0826. The currency also collapsed to a three-year low of 115.09 yen in Asian trade, as investors worried about eurozone turbulence.
The forecasts about global recovery aren’t very hopeful. Additionally, investors are worried due to the court decision challenging German participation in Europe’s stimulus program.
The European Central Bank may lose the Bundesbank as a participant in a scheme aimed at weakening the economic blow from the pandemic. Germany’s highest court gave ECB three months to justify purchases under its bond-buying program on Tuesday.
What about the Japanese Yen?
The yen rallied on Wednesday. It rose against the dollar, trading at 106.22 by the end. The currency hit a seven-week high against the greenback and a three-year peak against the euro.
The safe-haven yen had been the pick of major currencies since the crisis started. That will probably continue – noted Kit Juckes, the Head of FX Strategy at Societe Generale. However, other major currencies were stranded as worries about U.S.-China tensions and dire economic indicators held optimism for recovery in check.
The yen skyrocketed to a three-week high against the Korean won on Wednesday. The currency is near to a month high against the Australian dollar as well. And it is already up by nearly 6% on the euro and about 2% on the dollar for the year.