SINGAPORE - The Japanese yen returned as a beacon of safety on Friday, hitting a one-month high against the dollar as deepening worries about coronavirus sent global financial markets into a tailspin.
FILE PHOTO: U.S. dollar banknotes are seen through a printed stock graph in this illustration taken February 7, 2018. REUTERS/Dado Ruvic/Illustration Hopes the coronavirus outbreak could be contained in China have vanished this week as infections spread around the globe, prompting governments into action and investors to panic.Money markets are now all but certain the U.S. Federal Reserve will lower its benchmark lending rate next month and the yen - heavily sold a week ago - has roared back to life.
It rose half a percent to a month-high of 109.03 per greenback on Friday, leaving the dollar heading for its worst week on the Japanese currency in more than three yearsAs investors dumped China-sensitive regional currencies, the yen soared. The Australian dollar tanked 0.5% to a fresh 11-year low on the dollar, but it lost twice as much against the yen.“I’m not surprised it’s reasserting itself,” said Mayank Mishra, FX strategist at Standard Chartered in Singapore.
“The safe-haven yen tends to do well even in scenarios when the Japanese economic outlook may be at risk. Unlike the Fed, which may be cutting rates, the Bank of Japan does not have that luxury - so the downward pressure on the currency from the yield channel does not materialise.”
Wow, looks like we’ll start having to make our own stuff again. Question is, are American workers up to the task?
this actually destroys Chinas economy
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