The euro gained significantly after bulls traded the U.S. dollar after the coronavirus spread in America. The currency was last up to $1.1158. Before that, it reached its two-month high on Tuesday.
Meanwhile, the sterling lowered against the euro. It bought $1.2819. The euro was traded versus the sterling at 87.07 pence. This point is the highest in more than four months.
Experts think that the sterling may stay low until there is some understanding between Britain and the European Union. As the trade talks continue without results, uncertainty weighs heavily on the currency.
The Chinese yuan, on the other hand, rose despite the bad data about China’s services sector. It fell to its weakest point in February. The yuan, however, skyrocketed to a six-week high of 6.9288 per dollar in the onshore market.
The country’s economy suffered severely due to coronavirus. But it seems China is rebounding slowly. Meanwhile, the Australian dollar lowered, at last trading at $0.6599. The weak Chinese data influenced the Aussie negatively, as the country’s economy depends highly on trade with China.
What about the U.S. dollar?
The dollar dropped to 106.85 yen in Asia on Wednesday. It reached its lowest point in almost five months, before steading at 107.36 yen. After the U.S. Federal Reserve’s emergency, a 50 basis point rate cut caused more anxiety about the coronavirus’s impact, the currency fell sharply. Treasury yields tumbled down to record lows as well.
Bull bet that the Fed will cut rates more than the European Central Bank. So far, the G7 and the Fed were not enough to support markets, according to Masafumi Yamamoto, the chief currency strategist at Mizuho Securities in Tokyo.
Furthermore, the dollar traded against the Swiss franc near its lowest point in nearly two years. The traders returned to traditional safe-haven currencies as rate cuts were deemed insufficient to neutralize the risks posed by the global spread of the virus.
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