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Dollar dips as pandemic worries persist despite some signs of hope

ForexApr 07, 2020 07:35
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2/2 © Reuters. Illustration photo of Japan Yen note in front of U.S. Dollar and British Pound Sterling notes 2/2

By Stanley White

TOKYO (Reuters) - The dollar fell against the yen on Tuesday as underlying concerns about the economic shock wrought by the coronavirus crisis kept many investors on edge.

The pound clawed back some recent losses against the dollar, but sentiment for sterling remains fragile after British Prime Minister Boris Johnson was moved to intensive care after his coronavirus symptoms worsened.

The yen cheered Japanese Prime Minister Shinzo Abe's unveiling of a massive fiscal stimulus worth almost $1 trillion to offset the economic impact of the pandemic.

Traders warned that further gains in the yen may be limited because Abe has agreed to declare a state of emergency for Tokyo and other parts of Japan to slow coronavirus infections.

Many investors are looking for signs of a peak in the pandemic, but some analysts warn of volatility given the unpredictable nature of the previously unknown virus.

"Signs of a slowdown in the spread of coronavirus provided markets a boost, but the reality is we cannot be certain, so it's natural for the dollar to come lower," said Takuya Kanda, general manager of the research department at Gaitame.com Research Institute in Tokyo.

"It's difficult to trade solely on the factors from one country, because so many countries are in a bad state because of coronavirus."

The dollar fell 0.43% to 108.76 yen on Tuesday. Against the euro (EUR=EBS), the dollar eased to $1.0837.

The greenback fell 0.33% to 0.9753 Swiss franc .

The dollar came into Asian trade on a positive note as risk sentiment improved after the governors of New York and New Jersey pointed to tentative signs that outbreaks in their states was starting to plateau, but some traders remain cautious.

The pound rose 0.38% to $1.2394 on Tuesday following a 0.3% decline on Monday. Against the euro, sterling (EURGBP=D3) held steady at 88.21 pence.

Johnson was admitted to hospital on Sunday night and had been undergoing tests after suffering persistent coronavirus symptoms, including a high temperature, for more than 10 days.

Downing Street had said he was still conscious, though his condition deteriorated in the early evening.

Britain has no formal succession plan should the prime minister become incapacitated, but Johnson has asked Foreign Secretary Dominic Raab to deputise for him.

The Chinese yuan rose to a 1-1/2-week high against the dollar, buoyed by expectations of more government economic support measures and further signs that the coronavirus outbreak is receding in China, where the novel virus first emerged late last year.

The Japanese currency fell against the antipodean currencies (AUDJPY=) (NZDJPY=), but analysts cautioned against reading too much into the yen's moves because volumes are falling as more traders and corporate customers work from home.

Japan's prime minister is set to announce a state of emergency on Tuesday for the capital Tokyo and six other prefectures to stem a worrying rise in virus infections in major population centres.

Abe said the emergency would last around a month and give governors the authority to call on people to stay at home and businesses to close. It would stop short of imposing a formal lockdown.

The Australian dollar jumped 1% against its U.S. counterpart, while the New Zealand dollar also rose by 0.9% against the greenback as investors felt more comfortable buying currencies sensitive to risk.

The Reserve Bank of Australia kept policy on hold at a meeting today after it already slashed interest rates and embarked on quantitative easing.

Dollar dips as pandemic worries persist despite some signs of hope
 

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Comments (2)
Yelen Shim
Yelen Shim Apr 07, 2020 7:36
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save-haven? 🤣🤣*Safe
Quý Nguyễn
Quý Nguyễn Apr 07, 2020 4:40
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I think after Prime Minister of England become better ,he would be scared of Coronavirus
 
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