The U.S. dollar rallies again after the short downfall, caused by the unclear data. After the coronavirus outbreak, the dollar became one of the most sought-after safe-haven currencies and subsequently hit high along with the Japanese Yen. It seems that new job market data set it off to the latest high records. The data was released on Friday, showing that U.S. economy fares are much better than the other countries.
While the dollar soars, several currencies hit low. The New Zealand dollar dropped down to a two-month low at $0.6397. The Australian dollar also reached a decade-low of $0.6657 in early trade, last stopping at $0.6680. The dollar caused the euro to decline by $1.0942, reaching its four-month low. The pound has also lowered at $1.2873.
Lee Hardman, the currency analyst at MUFG, stated several reasons, which caused the dollar’s uprise. According to him, such rally was the result of the building concerns over the outlook for growth outside of the U.S., as well as the rising probability of President Trump winning a second term in the elections. Of course, new data helped it too, proving once more the resilience of the U.S. economy.
How about the Chinese yuan?
The Chinese yuan traded at 7.0069 per dollar offshore. The coronavirus epidemic is growing in China. The government may have to delay further the opening of businesses after the Lunar New Year holidays. Millions of people were due to return to work today, but so far, China’s cities are like ghost towns.
ANZ analysts noted that it’s a pivotal week, as the factories and ports in China are scheduled to open. They also stated, if it is achievable or not, and to what extent, the direction will be given about ongoing disruption as the virus outbreak continues.
Meanwhile, the Japanese yen traded at 109.64 per dollar in the morning. Investors continue to resort to the U.S. dollar and yen so far. Catril announced that until there is more clarity on the coronavirus’s full impact on economic activity, it’s hard to see the dollar coming under many challenges.