Tue, June 18, 2024

Some Safe-haven currencies skyrocketed. What about Dollar?

Some Safe-haven currencies skyrocketed. What about the dollar?

Safe-haven currencies rallied again after the coronavirus’ new cases were reported in the U.S. The Euro skyrocketed to its one-month high of $1.1074. It last stood at $1.1050 in Asia, up 0.3% after increasing by 1.7% last week. It’s the Euro’s largest gain in two years.

The Swiss franc also hit a 1-1/2-year high of 0.9610 francs per U.S. dollar on Friday, last stopping at 0.9642. The sterling, on the other hand, changed insignificantly at $1.2828, not far from its 4-1/2-month low of $1.2726 hit on Friday.

The U.S. dollar, however, fell after the government confirmed the first case of the coronavirus with a citizen who hadn’t any exposure to the infection. The growing rate of reported cases undermined the perceived strength of the U.S. economy.

The central bank will act as appropriate to support the economy in the face of risks posed by the virus epidemic – Jerome Powell, Federal Reserve Chair, issued on Friday. His statement was due to New York’s report of its first case of the illness, as well as Washington state’s announcement about the second death from the virus.

What about the Japanese Yen and the Chinese Yuan?

The yen has also gained against the dollar on Monday as traders raised their bets of an interest rate cut by the U.S. Federal Reserve this month. Bulls interpreted Powell’s comments as a hint that the Federal Reserve will cut interest rates by 0.25 percentage points.

Meanwhile, BOJ Governor Haruhiko Kuroda announced that the central bank would take necessary steps to stabilize financial markets. Such a course could cause the yen to lower after its recent rallies. The currency last stood at 108.15 against the dollar, after hitting high at 107.00 in early Monday trade.

Yen grew by 3.2% last week, showing the biggest gain since July 2016. The Australian dollar has also risen by 0.5%, bouncing back to $0.6538. The offshore yuan, on the other hand, steadied slightly at 6.9663 yuan per dollar.

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