The Dollar Edges Lower in European Forex
The dollar edged lower in European forex trading on Thursday. Petro currencies have gained and investors were seemingly opting to move into riskier currencies.
The U.S. Dollar Index, stood at 99.640, lowered 0.1% as EUR/USD dropped 0.2% to 1.0939. Moreover, GBP/USD gained 0.3% to 1.2418 while USD/JPY rose 0.1% to 107.28.
The COVID-19 pandemic has caused economies to virtually close down. Governments have restricted travels, business operations, attempted social distancing policies and ordered lockdowns to contain the virus spread.
Data on U.S. initial jobless claims, which is one of the earliest gauges of economic trends jumped to 3.28 million. It has blown past the previous record of 695,000 in 1982 and the U.S. government expects another 3.5 million claims. A large number of claims could mean that displaced workers are availing themselves of the support from the stimulus bill.
This is but a clear evidence of economic damage caused by the novel coronavirus.
The price of oil rose sharply following President Donald Trump’s statement that Russia and Saudi Arabia would make a deal. The U.S. President has announced the two countries would end their price-war within a few days.
The world’s oil prices have dropped by roughly two-thirds this year. The low prices have impacted the finances of the countries that depend on oil revenue for funding.
The Dollar and Other Currencies
USD/NOK traded 1.6% lower at 10.23.23, while USD/RUB fell 1.4% to 77.63. Moreover,
Russia spent 5% of its reserves defending their currency, the ruble, in the week to the 20th of March.
In more forex updates the South African rand fell hitting record lows while the Turkish lira fell to a two-year low.
USD/ZAR was 0.3% lower at 18.15 and USD/TRY was 0.5% lower at 6.6623.
The dollar gave up some of its recent gains following a 10% increase in oil prices boosting commodity-linked currencies. Despite uncertainties over the coronavirus pandemic, the safe-haven greenback stood strong against other major currencies.
Commodity-linked currencies rose, with the Australian currency gaining 0.6% to $0.6110, and the Canadian currency at 0.65% to C$1.4146.
Against most major currencies, the USD has remained firm. Investors moved into USD safety amid massive disruption to global trade caused by the pandemic.
In forex news however, investors seemed ready to move out of the safe-haven currency into riskier currencies amid U.S. unemployment data.
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