Safe-haven demand increased on Friday. U.S. dollar soared

The safe-haven yen rallied on Friday, reaching 107.46 against the U.S. dollar. The Japanese currency also surged forward by 0.6% versus the Aussie and jumped up by 0.4% against the kiwi. The Bank of Japan released the details about a lending scheme for small-cap companies damaged from the coronavirus pandemic after an emergency meeting. So far, this news hasn’t influenced the yen significantly.

Meanwhile, the U.S. dollar soared against a basket of currencies. The demand for safe-haven currencies increased due to the rising diplomatic tensions between the United States and China. On Friday, the greenback climbed up by 0.24% to $1.0925 per euro, after gaining 0.3% in the previous session. And the dollar bought at 0.9715 Swiss francs as well.

U.S. President Donald Trump blamed China for the spread of coronavirus and incorrect handling of outbreaks. China’s treatment of the former British colony of Hong Kong added stress to the already tense relationship between the countries.

There had been problems between the United States and China for quite a while now. Some very short-term players are changing positions from one day to the next. That makes it difficult to see the general trend. Nonetheless, the dollar looks to be supported overall – stated Yukio Ishizuki, the FX strategist at Daiwa Securities in Tokyo.

The sterling remained steady at $1.2216, but traders expected its decline. They forecasted that the new data, which was due on Friday, would show a plunge in British retail sales.

What about the Chinese Yuan?

The yuan plummeted down to a 1-1/2 month low. But it traded at 7.1210 against the dollar at last notice. Despite the new tensions, which added some pressures to the Chinese currency, it still found some support after policymakers in Beijing issued new stimulus measures.

The Australian and New Zealand dollars tumbled down as well due to their connection with the yuan. The Australian dollar fell by 0.49% to $0.6535, while the New Zealand dollar declined to $0.6106.