Connect with us

Forex

Forex Market Support for USD as Traders Remain Cautious

mm

Updated

 on

Forex Market Support for USD as Traders Remain Cautious
  • Coronavirus Crisis Still in Focus for Many Currencies
  • USD Remains Strong on Risk-Off Attitude
  • Asian Markets Open Lower Amid Negative Sentiment

Risk Aversion has been the key word of the week so far as the coronavirus pandemic continues to dominate both headlines and market movements across the globe. The forex market remains very much impacted by the virus as rising case numbers tempt traders toward the safety of the US Dollar once again. Today’s opening in Asia looks to be following along a similar pattern as markets fall once again amid rising case numbers and an all-round uncertain outlook.

Virus Concerns Persist Across US and Globally

Coronavirus cases continued to rise on Thursday with more than 60,000 cases again reported in the US in figures that were similar to record daily numbers reported in the previous days. This has undoubtedly hampered the economic recovery which had been taking place in previous weeks and this was felt on a largely difficult day for American Markets.

Many currencies around the world suffered from the uptake in US cases. None more so than the Euro. The EUR/USD took a sharp dive on Thursday to finish the day trading below 1.13 and with little sign of a bounce back coming up. More positive economic data in the UK too was largely offset as the GBP/USD also fell. Both will be hoping for better news to come from the US today, though that looks unlikely.

Dollar and Yen Return to Safe-Haven Strength

The wild market movements of recent days, particularly Thursday, combined with a general concern over a possible second wave of the virus as case numbers accelerate, has driven traders back toward the dollar. Forex brokers have noted a strong move back to what is considered a global safe-haven in times of difficulty.

The Japanese Yen has been another beneficiary of the risk averse mood among forex traders. The USD/JPY market fell below the 107 level to mark a new ten-day low for the pair. Historically, like the Greenback, the JPY has also been viewed as a very safe choice when there is a risk-off mood as is currently the case. With the release of US inflation figures set for later today, there would appear to be no move away from either currency forthcoming before the end of the week.

Asian Market Opening Continues Downward Trend

Markets across Asia opened with further falls on Friday. These are likely a continuation of the difficult prior trading day on Wall Street, and an indicator of concern on the rampantly rising COVID-19 case numbers in the US. Markets in Australia, Japan, Korea, and China all fell to start the session.

Oil prices have also continued their slump in the Asian session, falling a further 0.5% at the time of writing as traders around the world express concern at how reopening of economies could be impacted. With a quiet economic calendar in many regions, expect case numbers to be a key driver again today.

 

 

Spread the love

Anthony is a financial journalist and business advisor with several years’ experience writing for some of the most well-known sites in the Forex world. A keen trader turned industry writer, he is currently based in Shanghai with a finger on the pulse of Asia’s biggest markets.

Advertiser Disclosure: Securities.io is committed to rigorous editorial standards to provide our readers with accurate reviews and ratings. We may receive compensation when you click on links to products we reviewed.

ESMA: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Between 74-89% of retail investor accounts lose money when trading CFDs. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

Investment advice disclaimer: The information contained on this website is provided for educational purposes, and does not constitute investment advice.

Trading Risk Disclaimer: There is a very high degree of risk involved in trading securities. Trading in any type of financial product including forex, CFDs, stocks, and cryptocurrencies.

This risk is higher with Cryptocurrencies due to markets being decentralized and non-regulated. You should be aware that you may lose a significant portion of your portfolio.

Securities.io is not a registered broker, analyst, or investment advisor.