The riskier currencies rallied during the last days. However, investors expect some dire news soon, which caused the dollar to strengthen once more against the other currencies. The governments around the globe are preparing for economic re-start, but traders fear that it will be a long and painful process.
As a result, the risk-sensitive Australian and New Zealand dollars and the oil-sensitive Canadian dollar lowered roughly by 0.3% during the recent session.
Sean Callow, Westpac FX analyst in Sydney, noted that Investors are three weeks into a quarter that looks like it’s going to be the worst in many decades. He thinks that risk appetite won’t last very long.
The Australian dollar traded at $0.6344, a cent lower than a one-month high hit last week. The New Zealand dollar, on the other hand, held at $0.6013 after strong first-quarter inflation.
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What about the European currencies and the Japanese Yen?
As the investors bought the U.S. dollar due to its safe-haven status, the European currencies declined slightly. The euro fell by 0.2% at $1.0858, while the pound lowered to $1.2477. The Japanese Yen also dropped, even though it’s also a risk-off currency. The dollar soared by 0.2% to 107.77 yen.
The Chinese yuan, meanwhile, was steady at 7.0711 per dollar in offshore trade. China suffered its first quarterly growth contraction, but investors expect it to cut its benchmark lending rate later on Monday.
According to the experts, this week will be crucial to the pandemic recovery as the authorities worldwide make tentative steps toward easing lockdowns. Furthermore, investors are waiting for the U.S. monthly employment figures, as well as eurozone survey indicators.
Traders are also closely watching an announcement due in New Zealand on Monday about the country’s next steps concerning the existing restrictions.
So far, Britain is not considering lifting its lockdown, according to a senior minister. Meanwhile, state governors have argued with President Donald Trump in the U.S. over coronavirus testing capacity and how quickly their economies can re-open.
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