Dollar Gains as Coronavirus Cases Lower
The dollar rose in Asia on Monday as virus hotspots reported a number of fatalities lowered over the weekend. However, report of a 701,000 reduction in U.S. non-farm payrolls on Friday has subdued investors’ expectations. The COVID-19 pandemic has caused lockdowns that have led to economic damage in the U.S. and in other countries globally.
President Trump expressed hope on Sunday as he saw a “leveling-off” of the virus crisis in some cities.
Masafumi Yamamoto, chief currency strategist at Mizuho Securities said when a head of state is stricken, it causes concern. He referred to holders of sterling and sterling assets in forex trading.
Moreover, the USD/JPY pair flattened earlier losses, rising 0.42% to 108.92. Reports said Japan plans to declare a state of emergency by Tuesday.
Yamamoto said coronavirus cases in Japan may not peak for another month. So the markets will think that now its Japan’s turn. He also added, a state of emergency is necessary, but this could be yen negative.
Japan’s prime minister will declare a state of emergency over COVID-19 as the number of infections topped 1,000 in Tokyo. The Yomiuri newspaper reported plans to declare a state of emergency will likely be announced on Monday.
Dollar Wins Over Sterling as PM Johnson is Hospitalized
The pound fell against the dollar and euro on Monday after PM Johnson’s hospitalization. His hospitalization was a “precautionary step” because he showed persistent symptoms of COVID-19, ten days after testing positive.
Weighing on sterling is Britain’s constitution – who would take over if Johnson cannot continue to lead?
COVID-19, which started in China last year, has turned into a pandemic that has infected more than a million people. It has killed over 68,000 people and damaged economies globally.
In the offshore FX market, China’s yuan held steady at 7.1134 per USD. Chinese mainland markets closed today for a public holiday. The yen fell 0.4% to 108.93. It also weakened against the euro, the AUD, and the NZD.
Meanwhile, the US currency eased slightly to $1.0814 per euro and held steady at 0.9769 Swiss franc. However, sentiment for the American currency remains fragile following data last week that showed U.S. job losses have soared.
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