Epidemic fuels talk of a federal reserve rate cut. Thus, the dollar is nursing losses. In the H1 this year, markets bet on federal reserve rate cuts. United States CDC official is urging Americans to prepare for an outbreak.
There are rising expectations of a United States rate cut. Thus, on Wednesday, dollar nursed losses. Moreover, there are warnings from U.S. health officials concerning the spread of the coronavirus. Therefore, it raised a question of the perceived strength of the United States financial assets.
Against a basket of six major currencies, the dollar’s index stood at 99.081. On the day there was a little change, but it was down 0.9% from a near three year high of 99.915 hits last week.
The United States dollar traded against the yen at 110.37 yen. It gained in Asia 0.1% on Japanese buying. It was before month-end, nevertheless; still, almost two full yen below its 10-moth high touched last Thursday.
On Thursday, the euro hit a near three-year low of $1.0778. Nevertheless, it extended its rebound and fetched $1.08815 today.
Until last week, the dollar had risen. It was because investors regarded the US as less exposed to the coronavirus.
They believed that its economy is more resilient than other major economies. It made United States assets a safe harbor.
Growth in China will most probably fall further from a three-decade low of 6.1% last year. The outbreak, of course, caused massive disruptions in the economy. Meanwhile, both Japan and the eurozone are seen on the brink of recession.
However, such convictions have started to crumble.
A top official in the United States Centers for Disease Control and Prevention (CDC) urged Americans for beginning to prepare for the coronavirus spread within the country. Another official thinks it is longer a question of if, but when, the virus will become a pandemic.
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