- JPY Hits Three-Year High Against US Dollar
- Euro also at Two-Year High as Others Suffer
- Multiple Global Currencies Crumble amid Recession Fears
Monday trading has marked no uptake in fortune for the majority of the forex market. Despite the fact that China has reported its lowest number of new cases since the coronavirus epidemic began in January, just 40 new cases today, the market remains gripped by tension across the world. This has seen both the Japanese Yen and Euro soar in value against many other currencies that are struggling under the economic weight of the crisis.
Huge Spike in Safe Haven Yen as Market Tumbles
The biggest jump to happen as markets reconvened after the weekend was in Japan. The Yen, long known as a favored forex currency safe haven in times of trouble, leapt more than 3%. This has seen it reach a three-year high against the Dollar and marked a similar time period for the biggest daily increase in the currency.
Analysts are having an increasingly difficult time in forecasting the moves of the market, with many holding back on the majority of trades. The latest round of panic has most likely been triggered by the biggest decline in oil prices since the 1991 Gulf War. Brent crude has fallen more than 30% as Saudi Arabia engages in a price war that has further shaken markets at an already very delicate time.
EUR/USD Hits a Two-Year Peak
The Euro has also posted strong increases to start the week. A rise above $1.14 against the Dollar is a two-year high that is more concerning than usual if looked at in the context of the wider market picture. The move is seen as following the general tone of risk aversion with traders moving to shore up their positions within the safest currencies possible.
This is sure to change frequently throughout the day as huge losses are expected from both the FTSE 100 in London, and the Dow jones in the US when trading begins later today. As much as a 5-6% drop in these markets is forecast, following in the footsteps of similar losses from the Nikkei today in Tokyo. Few would be betting against further EUR/USD increases through the day.
Non-Major Currencies Hardest Hit
Elsewhere in the forex market, the biggest losers across a wide range of currencies have come from the so called minor, and exotic currency pairs. Oil prices again had a large part to play in this retreat with the Mexican Peso down as much as 6% against the US Dollar. The Canadian Dollar which is heavily linked to global oil prices also suffered. The Loonie was down 2%.
Being the counterpart and trigger to the oil price war also has not helped the Russian rouble. This has taken a dive by 5% to a four-year low. While not much optimism remains in the market, speculators may now be taking the opportunity to trade what they see as good value markets heading into the week.
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