The U.S. dollar and the Japanese yen climbed up on Thursday as investors’ demand on safe-havens increased due to the new coronavirus outbreaks. The greenback traded at $1.1256 per euro after gaining 0.2% in the previous session. It also bought 0.9493 Swiss francs, holding onto a 0.3% gain on Wednesday.
Meanwhile, the yen edged up to 106.86 against the dollar. The Japanese currency gained against the Aussie and the kiwi as well, reinforcing the heightened risk aversion.
The Australian dollar declined after data showed the economy shed twice as many jobs as expected in May. The currency traded to a low of $0.6838, extending a downfall from a one-year high reached last week. The New Zealand dollar also dropped to $0.6447.
Junichi Ishikawa, the senior foreign-exchange strategist at IG Securities in Tokyo, stated that upside for U.S. futures and other risk assets has dwindled as more people are talking about the second wave of coronavirus infections.
Concerns about new outbreaks support the dollar and the yen because they are both safe havens. Meanwhile, the British economy is not in good shape right now and the pound has some problems it has to face. Brexit remains a risk as well.
How is the Sterling faring?
The sterling lowered to $1.2557. Against the euro, the pound’s trade changed little, at 89.65 pence. Investors are waiting for a Bank of England meeting. They expect policymakers to expand quantitative easing in the face of a struggling economy and rocky trade negotiations with the European Union.
The BOE may boost its quantitative easing program by 100 billion pounds ($125 billion). Some analysts think that an even larger increase may occur amid concerns about the economic outlook.
On the other hand, the Chinese yuan climbed up slightly to 7.0735 per dollar in onshore trading. China’s top policymakers promised to keep cash abundant in financial markets, and further support growth, causing the yuan’s surge.
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