Sun, July 21, 2024

European currencies declined on Friday. What about others?

European currencies declined on Friday. What abouttheothers?

The euro collapsed on Friday. It traded at $1.0840 by the end of the session. The currency reached an almost five-year low versus the Swiss franc, at 1.502 francs, due to the crisis.

The British pound was also under pressure, trading at $1.2221. It plummeted down to a five-week low of $1.2161 overnight. The currency’s fall was caused by the British government’s refusal to extend the Brexit transition deadline beyond December.

Meanwhile, the risk-sensitive Australian dollar was steady in the morning trade, at $0.6464. However, overall, it tumbled down by 1% over the last week due to the concerns about the pandemic’s rebound.

The New Zealand dollar, on the other hand, edged up to $0.6008 from a three-week low of $0.5958. Larger economies started to ease lockdowns, and most major currencies remain steady while traders evaluate the situation.

The yen traded at 107.40 per dollar as Japan lifted the state of emergency in large parts of the country on Thursday.

What about the U.S. dollar and the Chinese Yuan? 

The dollar tumbled down from a three-week high on Friday. But it still ended the week with modest gains, adding 0.5% against a basket of currencies. Investors were worried due to the reports about the second wave of coronavirus infections and the increasing tensions between the U.S. and China.

Furthermore, the U.S. economy seems to be in a worse state than traders anticipated. According to analysts, it probably won’t be able to rebound fully in 2020. Investors are also questioning the future of a partial trade deal. U.S. and China continue to exchange increasingly bitter comments.

The market is in a wait-and-see mode. It’s waiting to see whether U.S.-China trade tensions escalate – noted Rodrigo Catril, the senior foreign exchange analyst at National Australia Bank.

The Chinese yuan collapsed to a one-week low overnight due to this uncertainty. However, it managed to recover its losses, steading at the end of the session.

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