Yen drops, dollar rises amidst virus challenges

Reuters

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The dollar knocked over yen on Thursday after a steep and sudden slide in the Japanese currency.

Other currencies from euro to Australian dollar were also knocked over.

The dollar has surged almost 2% since Tuesday against the yen, reaching its highest in almost 10 months, and climbed to near three-year highs against the euro.

Its DXY index against the world’s most traded currencies, which is up 3.6%, rose overnight to its highest since May 2017. It also gained to its best levels of the year against China’s offshore yuan and MSCI’s index of emerging- market currencies.

A host of reasons were cited for the move, among them the outperformance of U.S. economic and earnings numbers and worries over the threat of recessions in Japan and the euro zone.

“I think this has really brought into focus the role the dollar is playing as a safe haven,” said Rabobank senior currency strategist Jane Foley. Japan’s proximity to China’s coronavirus problems and recent poor economic data there had also turned markets off the yen”, she said.

 

L.Nasir