The United States President Donald Trump banned travel from Europe for stemming the coronavirus. Thus, on Thursday, safe-haven currencies were in demand with the Japanese yen and the Swiss franc leading against the struggling dollar.
Traders were very much disappointed by the lack of broad measures in Trump’s plan to fight the pathogen. Moreover, the latest ban is posing a new disruption to the global economy. Traders are prompting to bet on further aggressive easing by the Federal Reserve.
Last week, there was a hefty half-point. Thus, money markets are now expecting another 100 bps of easing from the Federal Reserve by next week, taking the policy of the benchmark interest rates to zero.
Moh Siong Sim is a currency strategist at the Bank of Singapore. He said that the market was looking for more.
The Japanese currency climbed 0.8% versus the dollar to 103.65 yen just below a four year high of 101.28 hits on Monday in early London trading. Versus the dollar, the Swiss franc climbed 0.2% to $0.9365.
On Thursday, as European and Asian stock markets were a sea of red, as risk aversion was the dominant theme in currency markets. It forces traders to stampede out of currencies heavily geared to the global economy, such as the Australian dollar and Norwegian crown.
On Wednesday, Trump announced a ban on travelers from 26 European countries entering the United States for a month.
To counter the virus, he unveiled economist steps. Nevertheless, his address from the Oval Office was light on remedial measures beyond assurances that the virus has no chance against them.
Market watchers’ focus is now on the European Central Bank. Their traders forecast a cut to the first deposit rate by ten bps.
After the monetary policy meeting, a press conference is due at 1230 GMT.
It is the leading news for today.
- Trading Instrument