USD remains ever strong as the world looks to life after lockdown
On Monday the dollar rose against the yen as moves by the United States and other countries around the globe to re-open their economies raised hopes for a quicker global recovery from a deep recession triggered by the coronavirus health crisis.
Sterling (GBP) changed little against the dollar and the euro after British Prime Minister Boris Johnson outlined his government’s plans to slowly ease Britain’s lockdown restrictions, while over in the United States, April figures showed an incredible 20 million citizens now registering themselves as unemployed.
This being the largest number recorded since the great depression, has done little to see traders back off as they look to bet on future growth.
Tohru Sasaki, head of Japan markets research at J.P. Morgan Securities in Tokyo said “The bad news about the U.S. labour market was pretty much as expected, and people now assume that economic activity will restart sooner rather than later in the United States and Europe, we don’t have to be so bearish on the dollar”
The dollar will often trade as a safe-haven asset, this is thanks to its reserve currency status, and it has recently developed some positive correlation with Wall Street as investors focus on yields. On Friday, Wall Street indexes rallied, defying the gloom from one of the worst U.S. jobs reports in decades.
The dollar rose 0.28% to 106.95 yen on Monday, and was steady at $1.0843 against the euro , it also changed hands at 0.9710 with the swiss franc.
The Australian dollar, which is often traded as a proxy for risk because of its close ties to China’s economy and global commodities, recovered from an early fall and rose to $0.6546,while the New Zealand dollar steadied against its U.S. counterpart at $0.6137.
Meanwhile in the U.K , Prime minister Boris Johnson, announced live on television a limited easing of COVID restrictions that have shuttered much of the economy for weeks, and even included encouraging some people to return to work. The government wants the rest of the United Kingdom to take the same approach, but there were immediate divisions, with the leaders of Wales, Scotland and Northern Ireland saying they were sticking with the existing “stay-at-home” message.
Johnson’s government has faced criticism over its handling of the pandemic. At nearly 32,000, Britain’s coronavirus death toll is the second highest in the world, behind the United States.
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