Safe-haven currencies soared as Covid-19 cases rose in U.S.

forex currencies and U.S. dollar

The U.S. dollar and other safe-havens surged forward against their riskier currencies on Friday. A rise in new COVID-19 infections in the United States further undermined the hopes for a quick recovery in the economy.

According to reports, there were more than 60,000 new coronavirus cases across the United States in the latest count. That’s the greatest single-day tally by any country in the pandemic so far. This discouraged some U.S. consumers from returning to public spaces.

However, the caution bolstered the dollar index by about 0.1% in Asia. It rose to 96.863 from a near one-month low of 96.233 touched on Thursday. The safe-haven Japanese yen also hit a two-week high against the greenback, jumping to 107.00 per dollar.

Meanwhile, the Swiss franc stayed near its highest level in six weeks versus the euro, at 1.0619 francs per euro. The franc traded at 0.9419 per dollar against the greenback after having hit a four-month high of 0.93625 to the dollar.

On the other hand, the euro lowered by 0.1% to $1.1273. It thus dropped back from a one-month high of $1.1371 on Thursday.

According to Thursday’s weekly data, the number of Americans filing for initial jobless benefits plunged to a near four-month low last week. However, the outlook remained highly uncertain, with companies from retailers to airlines announcing job cuts and furloughs.

Minori Uchida, the chief currency strategist at MUFG Bank, stated that, although there were improvements in economic data, people are starting to think that is just a natural outcome of economic reopening. Presently, they are starting to worry more about increasing infection numbers.  

What about the Yuan and the Aussie?

Lots of risk-sensitive currencies declined following their rally in recent weeks. The Australian dollar dropped by 0.3% to $0.6942, off Thursday’s one-month high of $0.7001.

However, the Chinese yuan, which often aligns with risk-sensitive currency groups, surged forward on Thursday. In offshore trading, the yuan traded at 7.005 yuan per dollar, lower by about 0.1%, having touched a near-four-month high of 6.9808 on Thursday.

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