USD rallies to two-week highs against JPY, EUR, GBP and CHF
The USD gained on most major currencies even despite better coronavirus updates domestically and globally.
The USD/JPY (大口） rallied to a two-week high at 15:00 SGT on Monday 06 April, even as coronavirus death rates across global hotspots showed signs of slowing down into the new week.
The greenback touched ¥109.382 briefly, before dipping back under ¥109.000 to begin Tuesday 07 April’s session.
Safe-haven appeal of USD in tact for the near-term
The dollar’s rise against the Japanese yen ‘notably’ reflected its demand among investors ‘even as funding pressure had somewhat eased with the series of measures put in place by central bankers’, IG Asia market strategist Pan Jingyi wrote in a note.
And amidst all the current market volatility and uncertainty created by coronavirus concerns, as well as ongoing expectations for dismal economic data, the greenback’s safe-haven appeal is likely to keep growing ‘in favour against most majors and Asian currencies alike in the near-term’, Pan adds.
With the Japanese government reportedly in the final stages of approving a US$990 billion stimulus package, and Prime Minister Shinzo Abe set to announce a state of emergency for Tokyo and six other prefectures, the USD/JPY will remain one to watch in the coming days.
US dollar strengthens against euro, pound and franc
The US dollar also rose against several other G10 currencies on Monday, including the EUR, GBP and CHF.
The dollar has been gaining steadily since mid-March, when the US government struggled to approve a US$2 trillion coronavirus stimulus package, among a slew of other negative pandemic-related government updates, including the reduction of interest rates to near zero.
Last Thursday 02 April, the dollar received another boost when oil prices went up after US President Donald Trump said the price war between Saudi Arabia and Russia are on track for a near-term resolution. This had helped to ease job loss concerns in the energy sector, which had spill-over effects on the rest of the US economy.
The equity markets have also been reflecting the general improvement in investor sentiments, with the S&P 500 and Dow Jones Industrial Average indexes soaring over 7% respectively on 06 April – in what was the best Monday session in over a month.
For now, the USD’s upward momentum appears to have ‘stalled’ as risk appetites returned on the back of more positive Covid-19 headlines in the US, according to UOB FX analysts.
The US dollar index rose to 100.685 from 100.576 on Monday.
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