April 7, 2020

Broad rally for dollar crushes Yen

LQDFX Forex news Blog– Broad rally for dollar crushes Yen

The Japanese yen fell past 112 against the dollar to a 10-month low extending its previous day’s slide against greenback’s broad rally.

A run of dire economic news out of Japan has stirred talk the country is already in recession. The Japanese funds were dumping local assets in favour of U.S. shares and gold.

Improving risk appetite in global markets has also hit the yen, which usually tends to benefit in times of market stress. By midday in London, the yen traded at 111.93 to the dollar, having earlier breached the 112 mark to hit the day’s low of 112.18.

The yen’s status as a safe haven is coming under pressure as unease grows about the rising number of coronavirus cases in Japan. There are already fears it will cast a pall over the Olympic Games in Tokyo, due to begin late in July, a hoped-for boost to the national economy and morale.

Japan’s currency tumbled to a nine-month low against the dollar and faced a barrage of selling against other currencies on Wednesday.

Japan’s currency also nursed big losses against the euro, the pound and the Australian dollar. At the same time, gold, which normally moves in concert with the yen, rose 0.6%.

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Forex – Broad rally for dollar crushes Yen

A host of reasons were cited for the Dollar move. Among them the outperformance of U.S. economic and earnings numbers and worries over the threat of recessions in Japan and the euro zone.

Against a basket of peers, the US Dollar hit its highest since April 2017 at a broad rally and is now up over 3.5% this year. The greenback climbed to near three-year highs against the euro.

The dollar has surged almost 2% since Tuesday against the yen, reaching its highest in almost 10 months. Yen dropped nearly 1.4% against the dollar, its sharpest fall in six months.

The Australian dollar sank 0.6% to 11-year lows at $0.6630 on a weaker-than-expected employment report.

The euro was 0.1% lower at $1.079. Against the euro, pound was flat at 83.69 pence, near a one-week low. Its 3.7% plunge since the start of the year is its worst start to a year since 2015.

Sterling slipped for the fourth straight day against the dollar on Thursday as the U.S. currency’s broad rally offset data showing a strong rebound in UK retail sales.

The currency ticked higher immediately after the release. Earlier, it had fallen to 10-day lows of $1.2884 but the modest move fizzled quickly, leaving the pound 0.1% lower at $1.2908. Sterling had posted a 0.6% loss on Wednesday for its biggest daily fall since early-February.

Oil prices added to overnight gains while gold loitered around $1,609 per ounce. U.S. crude last sat 25 cents firmer at $53.54 per barrel and Brent added 23 cents to $59.35.

PLEASE NOTE The information above is not investment advice.

Sources: Reuters, Investing, CNN money

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