The Japanese Yen increased steadily over the last weeks, due to its safe-haven status. But after the new data showed the Japanese economy’s decline, the yen fell. It managed to hold steady in a narrow range at 109.74 per dollar but may lower further in the coming days.
The Australian dollar fell 0.39% to $0.6690 after minutes from the Reserve Bank of Australia’s first meeting of the year. Policymakers discussed easing policy, which caused the currency’s collapse.
Meanwhile, the onshore yuan lowered a bit at 6.9859 versus the dollar. China is still trying to squash the coronavirus outbreak. Hence, its economy’s downfall.
The New Zealand dollar also dropped by 0.4% to $0.6411. Its economy is heavily reliant on China’s.
The Euro Continues to Climb Down. What about Sterling?
Germany released new data, which showed weak manufacturing and gross domestic product. As a result, the euro fell against the U.S dollar on Tuesday, reaching its three-year low. China’s economy’s lowering also influences the euro. It seems that the eurozone is more vulnerable to external shocks than experts thought.
Junichi Ishikawa, the senior foreign-exchange strategist at IG Securities in Tokyo, stated the euro is close to testing an important support level at $1.08.
According to Ishikawa, the currency seems oversold now, and in the very short-term, there could be a jump. However, the senior foreign-exchange strategist also noted the euro’s fundamentals still point more to the downside.
So far, the currency fell 0.12% to $1.0827 in Asia, close to its lowest level since April 2017. Germany’s ZEW survey was released on Monday. This data will influence the currency further.
Meanwhile, Sterling dropped against the dollar and the euro. The terms of the trade negotiation between Britain and the EU are still dubious. Such uncertainty has a negative influence on the currency.
Britain and the European Union laid out conflicting views on how to proceed with negotiations. So far, they don’t seem ready to cut the deal. Sterling declined by 0.4% on Monday, at last standing at 83.33 pence per euro.