Coronavirus cases continued to spread around the world exacerbating concerns and prompting investors to seek refuge in safe-haven assets.
The International Monetary Fund said on Wednesday the global spread had crushed hopes for stronger growth this year.
However, a Fed report showed there were signs the epidemic had begun to weigh on U.S. business sentiment. The American coronavirus death toll rose to 11 on Wednesday, and California declared a state emergency. U.S. lawmakers have approved an $8.3 billion emergency bill to help contain the virus.
There are now more than 90,000 COVID-19 coronavirus cases globally, with over 3,000 deaths. Mainland China reported a rise in new infections on Thursday, Italy has closed its schools and California has declared a state of emergency.
The European Central Bank is expected to cut interest rates by 10 basis points next week, joining its peers in the United States, Canada and Australia. Also, money markets were pricing in another 25 bps cut from the current 1% to 1.25% range at the next Fed meeting.
Forex – Investors seek refuge as COVID spreads
The coronavirus outbreak weighed more strongly on the dollar and other major currencies. Traders will be watching later in the day the release of initial jobless claims and factory orders in the U.S. Both data sets are expected to be weaker.
The US dollar fell on Thursday amid expectations of the Federal Reserve will cut interest rates further. The greenback remained close to the two-month low of 1.1214 it reached against the euro, last trading 0.4% lower at 1.1175.
The Canadian dollar was down 0.1% against the U.S. dollar at 1.3399. The Bank of Canada joined the Fed in cutting rates by 50 bps – its largest cut in 10 years.
Versus the safe-haven Japanese yen, the dollar’s weakness was more pronounced. Dollar-yen was last down 0.7% at 106.81, a five-month low.
The euro also benefited from traders unwinding their carry trade positions. The common currency traded at $1.1170, heading back toward a two-month high of $1.1212 hit earlier in the week.
The Bank of England is leaving rates unchanged for now. The sterling rose to a one-week high of $1.2931 and a three-day high versus the euro of 86.22 pence.
In commodity markets, oil rose on Thursday after major producers agreed on deeper output cuts to bolster prices.
Brent crude rose by 19 cents, or 0.4%, to $51.32 a barrel by 1133 GMT. U.S. WTI was up 15 cents, or 0.3%, at $46.93.
Gold prices rose on Thursday as coronavirus cases continued to spread around the world prompting investors to seek refuge in the safe-haven metal.
Spot gold was up 1% at $1,651.41 per ounce by 1235 GMT. U.S. gold futures rose 0.6% to $1,652.40.
PLEASE NOTE The information above is not investment advice.
Sources: Reuters, Investing, CNN money