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Forex: Dollar Retreats as Safe-Haven Yen Jumps on Virus Fears

ForexJan 31, 2020 02:08PM ET
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By Yasin Ebrahim

Invesing.com – The dollar fell Friday, paced by losses against safe-haven currencies like the yen amid fears of a global pandemic as Chinese health authorities showed little sign they have a grip on the outbreak.

The U.S. dollar index, which measures the greenback against a trade-weighted basket of six major currencies, fell by 0.41% to 97.25.

The new coronavirus has spread to nearly 10,000 people worldwide and the death toll in China rose to 213, raising concerns over China's ability to contain the outbreak, which could severely curtail global growth.

Against the backdrop of the coronavirus risk, investors have piled into safe havens like the yen and Swiss franc.

USD/JPY fell 0.49% to Y108.42 and USD/CHF fell 0.54% to 0.9641.

U.S. data, meanwhile, showing the ongoing weakness in manufacturing did little to support the greenback.

The Chicago Purchasing Managers' Index (PMI) jumped to 42.9, well below forecasts of 48.8. That was the lowest reading since September 2015, as the slump in manufacturing activity continues.

As a leading indicator of the U.S. economy, the Chicago PMI helps economists measure business activity and new orders.

Consumer spending, meanwhile, increased 0.3% in December, in line with forecasts.

With just hours to go until the U.K. leaves the EU, the pound added to gains from a day earlier, rising 0.69% to $1.3184.

The pound surged on Thursday in the wake of the Bank England's decision to keep rates steady, with outgoing BoE Governor Mark Carney saying a cut would have risked inflation rising above the central bank's target.

EUR/USD rose 0.46% to $1.1081 despite ongoing signs of weakness in the eurozone economy after a preliminary reading of fourth-quarter GDP fell short of forecasts.

USD/CAD added 0.26% to C$1.3243.

Forex: Dollar Retreats as Safe-Haven Yen Jumps on Virus Fears
 

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Comments (2)
Strela Fxxx
Strela Fxxx Feb 02, 2020 6:27AM ET
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Brexit European economy will decrease by 20% ................
Mr Howell
Mr Howell Jan 31, 2020 5:00PM ET
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Swiss Central Bank considering intervention......Because appreciation affecting the country competitive advantage
 
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