Investors move on the safe-haven assets due to pandemic fear

The last months were turbulent due to the coronavirus outbreak. After the initial panic, it seemed that the stock market calmed down for a while, with the risk-off wave weakening. But the new outbreaks in Italy, South Korea, and several Middle Eastern countries started a massive sell-off once again.

The Japanese yen, which is one of the most popular safe-haven currencies, rallied after falling recently. The new data about worsening the Japanese economy caused its downfall, but after the virus fears rose again, the yen increased against the U.S. dollar. It traded 0.73% higher at 110.74 per dollar, after strengthening to 110.34 earlier on Monday.

Meanwhile, the U.S stocks collapsed, causing the dollar to fall after its long rally. The dollar index fell by 0.095% at 99.33 per dollar. While the Dow Jones Industrial Average, the Nasdaq and the S&P 500 lost almost by 3%, the European equities markets have also suffered severely. They reached their lower record since 2016.

Middle Eastern countries, Italy and South Korea aren’t faring much better. They are trying to crush the coronavirus outbreak, while it becomes pandemic, but so far, without serious success. However, China hasn’t reported new cases in Beijing during the last days.

What about the Aussie and New Zealand dollar?

The Australian and New Zealand dollars experienced sharp downfalls during the recent week. But they strengthened by 0.2% against the greenback on Monday. The Korean won mostly recouped heavy losses made on Tuesday, but the Chinese yuan increased by 0.2%.

The Swiss franc is also in demand besides the dollar and yen. The recent moves on the forex market are all a risk-off trade, – noted Marvin Loh, the senior global markets strategist at State Street Global Markets.

However, USD-JPY is holding up relatively well in the scheme of things and heightened coronavirus concerns, according to Action Economics analysts. So far, the investors haven’t discounted the yen as safe-haven due to its possible virus exposure.