Amid increasing numbers of fatalities from the COVID-10 pandemic, investors flock to safe-havens. Thus, on Wednesday, the United States dollar reversed its losses.
The United Kingdom and New York state announced their highest daily death toll overnight. Nevertheless, at the beginning of the week, there was a falling number of cases. In the country overnight, Andrew Cuomo, New York governor, reported 5.489 deaths.
The United States dollar index tracks the greenback. Thus, against a basket of other currencies, the dollar gained 0.34% to 100.257 by 11:50 AM ET (4:50 AM GMT).
Ray Attrill is head of the forex strategy at National Australia Bank. He told CNBC that the risk aversion and the United States dollar are going hand in hand.
He added that improvement was based on less-bad statistics that come out from various parts of the world. Nevertheless, their view is that the markets are going to be choppy. Attrill adds that they can’t expect an uninterrupted flow of singularly bad or singularly good news.
Shinzo Abe, the Japanese Prime Minister, officially announced a state of emergency overnight. Thus, the pair of USD/JPY was down 0.11% to 108.83.
There are forecasts that the dollar will get back its strength soon.
S&P downgraded its outlook on Australia’s sovereign AAA rating from stable to negative. Thus, the pair of AUD/USD slid 0.61% to 0.6129.
Joe Capurso is Commonwealth Bank of Australia currency analyst. He told CNBC that while the virus’s curve flatters, the economic effects of the corona crisis will linger for years.
He said that economies need time to re-open. Moreover, he thinks that some businesses won’t re-open. Unemployment will need some years to recover. Capurso believes that it means the yen and dollar will re-strengthen.