Dollar Rises, Yuan Falls As China’s Disease Continues
On Friday, the dollar held nearly a two-week high in forex trading. The upsurge was against the yen on positive U.S. economic data ahead of a critical jobs report.
Meanwhile, the yuan eased, along with the financial markets continued as tension as the death toll from a new coronavirus in China soared yet again.
Moreover, the Sterling traded close by a six-week low point versus the greenback in the FX Market.
It also nurtured deficits against the euro, which was plagued by persistent worries about discussions between Britain and the European Union for a post-Brexit trade deal.
On the other side, the recent upbeat of U.S. economic data and China’s stimulus steps gave traders some relief from heightened apprehensions regarding the new virus.
The matter was despite the ambiguity about the effect of the outbreak on global growth that looks set to keep most shareholders risk-averse, at least in the short run.
In a statement, chief currency strategist at Mizuho Securities in Tokyo, Masafumi Yamamoto, stated, “There is a perception that the U.S. economy will be less affected by the virus than China or other countries, so that is a factor for dollar strength.”
Yamamoto added, “Risk-off trades could take a break because we won’t know the true state of China’s economy until we see data for February. There could be some big declines in the numbers for China and other Asian countries.”
On the same day, the dollar traded at 109.97 yen on the foreign exchange market in Asia.
The value is just lower than a two-week high after it hit earlier.
Further Movements in the Forex Market
For the week, the dollar was on course for a 1.5% boost versus the yen. It would have been its most significant weekly gain since July 2018.
In the onshore market, the yuan plunged by 0.1% to 6.9796 per dollar.
Moreover, the onshore yuan declined by 0.6% as Chinese financial markets took a beating.
The matter happened after resuming the trade last Monday in the wake of a stretched Lunar New Year holiday.
In contrast, the offshore yuan was on course for a 0.3% improvement this week.
The currency was on boost by central bank stimulus and Thursday’s unexpected Chinese declaration of tariff cuts on U.S. imports.
For now, the focus has transferred to the closely-watched U.S. nonfarm payrolls report due later on Friday.
The forecast is to show that job innovation accelerated in January.
Last Thursday, the attitude for the dollar improved. It was after unemployment benefits plunge to a nine-month low, and worker productivity increased.
Earlier this week, data has been demonstrating a rally in U.S. manufacturing had also boosted the dollar’s fortunes.
Get the latest economy news, trading news, and Forex news on Finance Brokerage. Check out our comprehensive trading education and list of best Forex brokers list here. Subscribe now and receive FREE updates on the market today!