The Japanese yen rose by 0.33% to 108.15 per dollar in Asia on Monday. It also soared by more than 0.4% versus the Australian and New Zealand currencies. The yen is often sought as a safe-haven during times of economic stress because of Japan’s current account surplus.
The Chinese yuan traded at 7.0424 per dollar in the onshore market. The investors are waiting for China to release export data for March on Tuesday to evaluate the pandemic’s damage to the global economy.
Meanwhile, the U.S. dollar declined against the safe-haven Swiss franc, steadying at the end at 0.9661. The greenback traded at $1.0928 per euro, near to its lowest level over the previous week. The experts speculate that further declines of the dollar may be limited, but so far, the U.S. currency remains low.
On the other hand, the sterling held steady at $1.2470, last trading 87.67 pence per euro. The pound rebounded after Prime Minister Boris Johnson left the hospital, where he was getting treatment for coronavirus.
What about Commodity-bound currencies?
The Australian dollar lowered by 0.17% to $0.6338, pulling back from a four-week high. The New Zealand dollar also dropped by 0.21% to $0.6072 as investors abandoned risky trades.
The record output cut agreed by OPEC and other oil-producing nations failed to offset Investors’ concerns about lowering global demand. As a result, commodity currencies declined against their safe-haven rivals such as the U.S. dollar and the yen on Monday.
The U.S. currency gained against the Australian and New Zealand dollars. The greenback also rose by 0.63% against the Norwegian crown to 10.25 and 0.51% to 23.45 Mexican pesos. Furthermore, the U.S. currency held steady at C$1.3956 against the Canadian dollar.
Yukio Ishizuki, the FX strategist at Daiwa Securities in Tokyo, noted that the initial reaction suggests that the decline in oil demand is well ahead of the output cuts that were agreed upon. According to him, this is not only a negative for oil producers, but this also encourages risk-off trading, which should support the Japanese yen.
However, trading could take a downward turn as financial markets in Australia, Hong Kong, New Zealand, and Britain will close for the holiday on Easter Monday.