The major currencies continue to downfall. The U.S. dollar is only one so far, which managed to stay steady. During the last week, currencies fell sharply, mostly due to the coronavirus outbreak and its influence on the global economy. But there was also Brexit, new data from Germany and Japan, both of them showing an economic slowdown.
China is trying to hinder the epidemy. Meanwhile, some corporations announced that they would cease production until the coronavirus is contained. Apple is one of them. The company announced that it would probably miss its March quarter sales guidance.
The tech companies, which make cars in Chinese-located factories, have also stopped. Such decisions have a greatly negative effect on their scheduled sales.
Chris Weston, head of research at the Melbourne brokerage Pepperstone, noted that the market is trying to model itself on the coronavirus. And in the process, it’s struggling hard to understand how that goes.
It seems the U.S. economy suffered the least so far. Moreover, its new data showed good results. The dollar is still in high demand due to the investors’ risk-off tactics. It is sitting by a four-month high at 99.452 against a basket of currencies. Furthermore, the dollar touched a one-week high against the New Zealand dollar and the Australian dollar overnight.
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Meanwhile, the Euro slumped after Germany’s data showed its economy’s stagnation. The currency declined more than $1.08 against the U.S. dollar, reaching a record low since 2017. The Euro has dropped down by 3.7% amid increasing signs of divergence between the European and U.S. economies.
China is Trying to Stop its Economic Downfall
The country took several bullish steps to boost its economy so far. As a result, China’s yuan steadied, trading at 7.0017 per dollar in offshore trade at last.
However, the Australian dollar and the New Zealand dollar are both down roughly by 5% against the dollar. Such a downfall was caused by their close exposure to China, as the country is their main trading partner.