USD/JPY mounts rally as USD/SGD dips lower ahead of weekend
The USD/JPY is attempting a weekend rally amid concerns of a second wave of Covid-19 infections. Meanwhile, the USD/SGD turned lower on Friday.
Will the USD/JPY be able to sustain Friday's rally?
The USD/JPY forex pair is attempting a weekend rally.
The US dollar on Friday 12 June 2020 gained 0.7% against the Japanese yen on Friday 12 June 2020 – breaking a six-day losing streak, amid concerns over a second wave of Covid-19 infections in the US.
As at 10:45 GMT on Friday, the USD/JPY continues to remain lifted at ¥107.450.
This week, the greenback dropped as much as 2.7% against the safe-haven yen, as markets moved into profit-taking and correction mode.
Despite the sustained rally and a slight reversal of overtly bearish sentiments in the last 12 hours, IG Asia market strategist Pan Jingyi noted that the bias presently remains largely to the downside for the fiat currency duo, ‘with the expected yield differentials and the yen playing its safe haven role with the market risks on hand’.
Still, she added that ‘some short-term fluctuations should not be ruled out with the market trying to find its footing after the latest adjustment in sentiment’.
USD/SGD turns lower, but volatility to be expected this weekend
Meanwhile, the reverse is true for the USD/SGD minor pair.
The USD fell 0.5% against the Singapore dollar during Friday’s daylight hours, indicating that new pandemic fears might be outweighing any confidence that investors have in the safe-haven greenback.
This was a contrast from the earlier part of the session, when the pair had moved higher alongside USD/Asians, underpinned by the return of some sense of cautiousness to the markets, according to Pan.
As at 18:15 SGT on Friday, the USD continues to edge lower against the SGD, trading at S$1.38867.
Despite the latest downtrend and the ongoing amalgamation of US-centric concerns, Pan posits that Asian currencies remain the riskier assets moving into the weekend. The USD/SGD is also expected to stay volatile for the time being, with market events still a key driver of trading sentiments.
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