Japanese Yen climbed up Friday. What about other currencies?
The safe-haven Japanese yen climbed up by approximately 0.2% to 104.88 on Friday. On Monday, the currency tumbled down by around 2% versus the dollar, but it has recovered some of these losses since then. Despite the rebound, the yen was still on track for its worst week since June though. On Friday, the Australian dollar surged forward. It gained 0.3% at 0.7251 versus the dollar.
On the other hand, the U.S. dollar tumbled down as traders’ enthusiasm about a possible coronavirus vaccine was tempered by the second wave of the infections in Europe and the United States. So far, the world’s top central bankers are cautious about an economic recovery.
On Monday, global markets rallied after Pfizer Inc announced that its experimental vaccine was more than 90% effective in trials. As a result, the dollar jumped as traders quit their long-yen positions.
However, Forex traders were more risk-averse on Thursday and Friday, after the heads of the European Central Bank (ECB) and the Federal Reserve highlighted that the economic outlook is still uncertain.
Two ECB policymakers stated that the eurozone would suffer as a result of new lockdown measures even though the prospect of a vaccine is a source of relief.
The market was caught between hopes for the vaccine in the future and the reality of the current coronavirus numbers – noted Jeremy Stretch, an FX analyst at CIBC. He added that it seems as if the market still wants to try and end the week on a more risk-orientated bias.
Meanwhile, the dollar plummeted down in the European session, losing approximately 0.1% during the day at 92.882 against a basket of currencies.
Kit Juckes, an FX strategist at Societe Generale, stated that if the Fed stays super-easy through the winter and beyond, the dollar becomes more bearish.
How did the New Zealand dollar fare?
The New Zealand dollar tumbled down 0.2% against the dollar at 0.6827. Despite that, the Kiwi is still up on the week after rallying to its highest since March 2019 on Monday.
The euro also gained slightly at $1.18155 on Friday. European stocks have plummeted down from their eight-month highs. Unfortunately, European countries’ lockdown measures to limit the spread of the Covid-19 hinder the global economic recovery.
The euro extended its gains from earlier in the week against the safe-haven Swiss franc, rising more than 1% on the week as a whole. It traded at 1.0813 on Friday.
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