Dollar supported as investors seek safety in liquidity
The dollar held gains on Thursday as investors rushed to the security of the world's most liquid currency as the coronavirus pandemic caused ...
BusinessThe dollar held gains on Thursday as investors rushed to the security of the world's most liquid currency as the coronavirus pandemic caused massive disruptions to global trade.FILE PHOTO: One hundred dollar notes are seen in this photo illustration at a bank in Seoul, South Korea, January 9, 2013. REUTERS/Lee Jae-Won/Illustration/File Photo
02 Apr 2020 09:00AMShare this contentBookmarkTOKYO: The dollar held gains on Thursday as investors rushed to the security of the world's most liquid currency as the coronavirus pandemic caused massive disruptions to global trade.The dollar index against a basket of major six currencies gained 0.53per cent overnight as the U.S. currency advanced against most of its major peers except for the safe-haven yen.
AdvertisementAdvertisementIn early Thursday trade, the euro was little changed at US$1.0959 after 0.69per cent fall on Wednesday. Sterling fetched US$1.2382 , having lost 0.40per cent on Wednesday.The Australian dollar changed hands at US$0.6080 , having dropped 0.99per cent in the previous session.
The dollar traded at 107.15 yen after it touched a two-week low of 106.925 on Wednesday.Markets were spooked after U.S. President Donald Trump's dire press briefing late Tuesday, in which he warned Americans of a"painful" two weeks ahead in fighting the coronavirus even with strict social distancing measures.
AdvertisementAdvertisement"If America's optimistic president is warning the worst of the pandemic is yet to come, what factory in their right mind would keep the doors open and workers on the payroll?" asked Chris Rupkey, chief financial economist at MUFG Union Bank in New York.
"With only a few actual data points so far, the results indicate this is looking more like a depression than a garden-variety recession."The starkest evidence of the damage came last week when weekly U.S. initial jobless claims, one of the earliest gauges of economic trends, jumped to 3.28 million, blowing past the previous record of 695,000 set in 1982.
The next jobless claims data release due at 1230 GMT on Thursday is expected to show another 3.50 million applications during last week.Economists' forecast in Reuters poll range from 1.5 million to 5.25 million."As we've seen yesterday, a deterioration in the U.S. economic outlook is likely to lead to strength in the yen against the U.S. dollar," said Shin-ichiro Kadota, senior strategist at Barclays.
The pandemic has shown few signs of abating with global cases on track to hit one million within a day or two, stretching over more than 200 countries.Some vulnerable emerging market currencies have come under extreme pressure as wide current account deficits, low credit ratings and limited foreign currency reserves heighten capital flight risks.
The Brazilian real and the South African rand both hit record lows while the Turkish lira sank to a two-year low.Graphic: World FX rates in 2020 https://graphics.reuters.com/GLOBAL-CURRENCIES-PERFORMANCE/0100301V041/index.html(Reporting by Hideyuki Sano; Editing by Sam Holmes)Read more: CNA »
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