Euro Rose Against the U.S. Dollar; What About Sterling?

422
Euro Rose Against the U.S. Dollar; What About Sterling?

The euro rose briefly versus the dollar and the pound on Thursday. The currency began gaining after the European Central Bank announced a 750 billion euro asset-purchase program in response to the coronavirus outbreak.

The sterling, on the other hand, plummeted near to its lowest point since at least 1985 against the U.S. dollar. The New Zealand dollar also dropped to an 11-year low as investors dumped riskier assets, with the Aussie falling to a 17-year low.

Investors worry because of the tightening liquidity. They are moving on the cash due to the wild financial market volatility. So far, the forex market remains turbulent as the pandemic continues.

What about the U.S. dollar? 

The dollar jumped against the major currencies on Thursday. As the epidemic threatens to paralyze the global economy, investors are trading everything to keep their money in dollars.

The currency rose by 0.8% against the pound to $1.1528, approaching the strongest point since at least 1985. It also climbed up more than 3% versus the Australian dollar to a 17-year high. Even though the Reserve Bank of Australia cut interest rates on Thursday after an out-of-schedule policy meeting, the Aussie remains low.

The greenback also increased by 3% to an 11-year high against the New Zealand dollar. While major central banks have taken steps this week to increase the dollar’s liquidity, it has done little to slow the dollar’s gains so far. The currency also gained 0.65% to 108.76 against the yen.

Junichi Ishikawa, the senior foreign-exchange strategist at IG Securities in Tokyo, noted that this is similar to what happened during the global financial crisis in that investors are even selling what are typically considered safe-haven assets.

According to Ishikawa, investor uncertainty is about as high as it can get. They buy the dollar, thinking that the biggest hedge against risk is holding money in cash. Which, on the other hand, causes the currency to skyrocket against the other currencies.

  • Support
  • Platform
  • Spreads
  • Trading Instument

For more news updates, visit our homepage now and see our latest news article. Want to learn more about trading? Visit our education page now and learn for FREE!

Tags:

Leave a Reply

Sending