On Wednesday, the 6th of May 2020, American Dollar had reported robust gains against a number of major currencies, while emerging market currencies had fallen to pieces following reveal of a raft of much-bleaker than anticipated global economic data, eventually leading to a flight-to-safety response and prodding investors to seek refuge on safe-haven US Dollar alongside its Japanese counterpart.
In point of fact, Wednesday’s (May 6th) PMI data for April had orchestrated a growing outcry in the global economy with European composite PMI falling at its steepest pace since 1998s to an all-time record low of 13.2, while the US payroll data had stunned the FX markets with a shrugging off of nearly 20 million jobs last month, suggesting a fifth of US workforces were pulled off since March 21st.
Amid such catastrophic outlook in global economy which several analysts said would likely to take more times to recover than the Great Financial Depression of 2007-2009, the Japanese Yen spiked to a seven-week peak against its American counterpart and a three and a half weeks peak against the bloc’s single currency.
Meanwhile, as investors appear to be on their toes amid such tattering global financial atmosphere with major economies from the five continents gobbling up steep losses over the narratives of a pandemic-driven halt to the global economy, forecasting further upside momentum of safe-haven currencies, a senior market analyst at Western Union Business Solutions in Washington, Joe Manimbo said on Wednesday (May 6th), “Safe havens are likely to hold the upper hand as many brace for the impact of the late week jobs data…Unlike 2008, or the 1930s for that matter, when most of the job losses were permanent, requiring a painful, slow process of reallocating labour to new areas.
” Citing statistics, on Wednesday’s (May 6th) FX market closure, the American dollar fell by 0.4 per cent against its Japanese counterpart to 106.10 yen, while the bloc’s single currency fell by 0.42 per cent to $1.0793 against the US Dollar, extending its three-day long losing run which had witnessed a nosedive of 1.69 per cent this week thus far and pared all of its past week’s gains.
Besides, the British Pound was jolted 0.77 per cent lower to $1.2438 against the US Dollar, while the US Dollar index (DXY), measured against a basket of six major currencies on an average had surged 0.36 per cent to 100.17 after hitting an intra-session high of 100.29.