Investors are looking for a peak in the coronavirus pandemic. The sentiment of risk is driving a decline in the dollar.
The United States President Donald Trump edged toward rolling back some restrictions. This was put in place for containing the outbreak of coronavirus. After that, investors stepped cautiously into riskier currencies. Thus, on Wednesday, the dollar nursed some losses.
Moreover, Federal Reserve took heavy measures with boosting the supply of dollars. Nevertheless, analysts are saying that it is very early for a full-scale retreat from safe-havens with the public health threat not yet fully contained. Thus, the dollar remains under pressure.
The People’s Bank of China nudged its guidance for a slightly lower range for the currency. Moreover, the BOC cut the rate of interest on its medium-term funding for financial institutions to a record low. Thus, the yen eased.
Next week, that move will most probably lead to a cut in the rate of the benchmark. This is because the central bank tries to limit the economic cost of the pandemic.
Dollar and Sterling
Michael McCarthy is a chief market strategist at CMC Markets in Sydney. This is because there has been a flood of money from the Federal Reserve, done to backdrop behind market moves.
Moreover, he added that the United States President, Donald Trump, made it clear that he wants to lift restrictions. That is exactly what the market wants to hear. Nevertheless, he adds, they are nowhere near the all-clear when it comes to the virus.
On Wednesday, the dollar fell by 0.16% to 107.05 yen. Moreover, it is at its lowest level in a month. It briefly slipped to $1.0994 per euro, the weakest indicator in two weeks.
Nevertheless, the dollar managed to snap two days of losses against the sterling. The greenback advanced to $1.2588.
On Tuesday, Trump said that he is near to completing a plan to end the coronavirus shutdown. Moreover, he added that he will talk with the governors of all 50 states.
- Trading Instrument