US dollar, The US Dollar Plunges in Asia | Finance Brokerage
0

The US Dollar Plunges in Asia

The US dollar plunged in Asia on Monday following the rise of COVID-19 cases over the weekend. Stocks suffered sharp losses and the US dollar index slipped 0.62% to 102.857 after its decline on Friday.

According to Yukio Ishizuki, FX strategist at Daiwa Securities, the dollar will still continue to be a safe haven for investors. Markets have moved from risk off to a phase where major players compete with each other. A lot of investors need to sell riskier assets and hold on to their money in US dollars, he said.

U.S. Treasury Secretary Steve Mnuchin said Congress is close to finalizing a $4 trillion stimulus package on Sunday. This package includes a direct cash payment of $3000 to families. 

On Thursday last week, the Federal Reserve expanded its swap lines to Brazil, Sweden, New Zealand, Mexico and Norway. It has also established swap lines with Denmark, Australia, South Korea, and Singapore. 

The AUD/USD pair lost 0.44% to 0.5773 while the NZD/USD was down by 0.82% to 0.5660. The USD/CNY pair flattened to a 0.01% gain of 7.0960.  Moreover, the USD/JPY was down 0.78% to 109.94, following Japan’s National Holiday on Friday. The USD bounced between gains and losses but last traded down 0.5% at 110.27 against the yen.

While the currency fell in Asia, GBP/USD pair jumped almost 2% in the wake of UK’s proposed emergency legislation on Friday. In the forex market this pair ended at 1.1692, or 44% up. 

In more FX news, USD/JPY remains heavy breaching 110.00 or down nearly 0.70% following the risk off. The American currency slumps with Treasury yields and loses nearly 120 pips from Asian highs.

The US Dollar Gets Sold Off 

The USD got sold off into a sharp decline in the US 10-year Treasury yields.  Risk aversion gripped Asia after the US Senate failed to advance the COVID-19 rescue package bill.  

The focus is on the US Senate vote again on the coronavirus economic package bill.  However, democrats and republicans remained split as the failed vote raised pressure to reach a deal. 

The US benchmark Treasury yields went down 13% at 0. 815% while the dollar index plunged 0.60%. It reverted towards the daily low of 101.95. Moreover, S&P 500 futures lost 4.14 as it hit the lower circuit at open. 

In forex trading, the USD/JPY will remain at the mercy of the risk sentiment and USD price action. Investors will await the US Senate’s second vote on the same US Coronavirus economic relief package bill, scheduled on Monday.

Comments Rating 0 (0 reviews)

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!

Leave a Reply

Sending

Subscribe to Our Newsletters

Have the best of Finance Brokerage News delivered directly to your mailbox. Subscribe now to receive the latest market news.