The Japanese yen declined slightly from a near seven-week high against the dollar on Thursday. Investors’ demand for the safe-haven yen reduced due to the optimistic reports about China. Chinese exports soared by 3.5% despite expectations of a 15.7% drop.
As a result, the Chinese yuan and the Australian dollar rose. The Aussie gained 0.8% at $0.6473. On the other hand, the U.S. dollar climbed up by 0.2% at 106.31 yen, after falling to 105.985, its weakest point since mid-March, on Wednesday.
Traders are still cautious due to the tension between the United States and China. The U.S. President Donald Trump blames Beijing of the coronavirus outbreak. New conflict threatens the phase one trade deal between two countries.
Turkey’s lira also plummeted to a record low of 7.25 per U.S. dollar, lowering further following comments from a Fed policymaker. Traders interpreted them as ruling out prospects of the Fed, extending a swap line to Ankara.
What about the Sterling and Euro?
The pound rose by 0.4% against the euro and the dollar on Thursday. The sterling jumped after the Bank of England held off on more stimulus and left interest rates steady.
Meanwhile, the euro edged up slightly to $1.0808 after three days of selling on Thursday. The currency has lost more than 1.5% this week.
Things could deteriorate further for a eurozone, which is already battered by the coronavirus pandemic – stated Antje Praefcke, the Commerzbank analyst. The German Constitutional Court’s ruling on the Public Sector Purchase Programme hit the euro harder. The next session is scheduled this week.
Germany’s highest court gave the ECB three months to justify purchases under its bond-buying program on Tuesday. If not, the European Central Bank will lose the Bundesbank’s participation in one of its main stimulus schemes.
Investors worry about the outcome. Deutsche Bank analysts have cut their euro view from bullish to neutral, lowering their mid-year forecast to $1.08.