The US Dollar weakened as Trump travel ban shocked global economy and fuelled demand for safe-haven currencies.
Trump announced on Wednesday a ban on travellers from 26 European countries entering the United States for a month. The U.S. flight ban exempts Britain but has been seen as a sign of an escalating crisis.
He unveiled economic steps to counter the virus. But his address from the Oval Office was light on medical measures beyond assurances that “the virus has no chance against us”.
Traders were also disappointed by the lack of broad measures in Trump’s plan to fight the pathogen, prompting traders to bet on further aggressive easing by the Fed.
Money markets are now expecting another 100 bps of easing from the Fed by next week taking the benchmark policy interest rates to zero. Also, market watchers are now focusing on the ECB where traders expect a cut to the main deposit rate by 10 bps.
The WHO described the coronavirus outbreak as a pandemic for the first time on Wednesday. Now officially a global pandemic, the coronavirus outbreak is forcing governments to announce massive financial stimulus to reassure investors.
START TRADINGForex – Trump travel ban shocks markets
Forex – Trump travel ban shocks markets
The Japanese yen and the Swiss franc leading gains against the struggling dollar after U.S. President Donald Trump travel ban. Risk aversion was the dominant theme in currency markets on Thursday.
The dollar was down particularly sharply against the safe-haven Japanese yen and Swiss franc.
In early London trading, the Japanese currency climbed 0.8% versus the greenback to 103.65 yen just below a four-year high of 101.28 hit on Monday.
The Swiss franc climbed 0.2% $0.9365 versus the greenback.
The euro steadied around $1.12585, not far away from a January 2019 high of near $1.15 hit on Monday.
Sterling fell against the U.S. dollar and euro on Thursday, weighed down by deepening market turmoil after U.S. President Donald Trump travel ban from Europe. Sterling was last down 0.3% against the dollar at $1.2772.
The pound was also down 0.3% versus the euro at 88.26 pence per euro, set for a fourth consecutive day of losses against the single currency. It was also close to an almost five-month low of 88.495 pence hit the previous day.
In commodity markets, oil prices fell more than 6% on Thursday following surprise travel restrictions imposed by U.S. President Donald Trump.
Brent crude was down $2.33, or 6.5%, at $33.46 by around 1359 GMT. U.S. crude was down $1.79, or 5.4%, at $31.19.
PLEASE NOTE The information above is not investment advice.
Sources: Reuters, Investing, CNN money