On Friday, the safe-haven Japanese yen rebounded strongly after hitting a near three-week low against its American peer earlier this week, while a closely monitored proxy for global economic health alongside risk factors, the Australian Dollar strengthened its footings against the greenback as the US Dollar index measured against a basket of six major currencies on an average dropped 0.23 per cent, pointing towards a chilling effect on an enhanced risk-appetite which the global FX markets had witnessed earlier this week over optimism of a Biden victory alongside a breakthrough development on Pfizer’s pandemic vaccine trial.
In point of fact, Friday’s equity market had down played risks of a renewed lockdown amid a sharp spike in pandemic cases across the United States and Europe, nonetheless, global FX markets remained more cautious as currency traders appeared to have held their horses.
US Dollar plunged as safe-haven Yen, Franc rise
In point of fact, Friday’s faltering of American currency came against the backdrop of a remark from US Fed Chair Jerome Powell who had been quoted saying on Thursday in an ECB (European Central Bank) forum that the health of world’s No.
1 economy had been deteriorating amid a slowdown in business activities, in part due to a steep lack in Government stimulus package, which eventually had weighed on the American currency. Quoting statistics, on Friday’s FX market closure, the bloc’s common currency euro gained 0.24 per cent to wind down the day at $1.1832, while the Australian Dollar rose 0.44 per cent to $0.7265.
Aside from that, the New Zealand Dollar had rounded off the day flatlined against its American peer at $0.6840, however, had jumped to its highest level since March 2019 following Reserve Bank of New Zealand’s meet on Wednesday that had discarded prospects of a negative interest rate.
Meanwhile, as the ECB policymakers had stressed that the global economic outlook had been anchoring over a strangers’ tide with uncertainties rising in alignment with soaring pandemic cases, addressing to a downbeat US Dollar outlook in an intermediate- to longer-term outlook, a senior market analyst at Western Union Business Solutions, Joe Manimbo said, “It is tough to have a sustained run of optimism when virus cases continue to mount. The market sees light at the end of the tunnel, but we’re still in the tunnel. ”