TOKYO, June 18 — The dollar and the yen edged higher today as growing concerns about a rise in coronavirus cases underpinned safe-haven demand for both currencies.
The Australian dollar fell after data showed the economy shed twice as many jobs as expected in May, highlighting the damage caused by lockdown restrictions put in place by the government to contain the outbreak.
The British pound traded in a narrow range before a Bank of England meeting where policymakers are expected to expand quantitative easing in the face of a sputtering economy and rocky trade negotiations with the European Union.
A surge in new coronavirus infections in several US states and the imposition of travel curbs in Beijing to stop a new outbreak there have served as a reminder about the risks of re-opening economic activity before a vaccine has been developed.
“Upside for US stocks and other risk assets has dwindled because more people are talking about a second wave of virus infections,” said Junichi Ishikawa, senior foreign exchange strategist at IG Securities in Tokyo.
“This supports the dollar and the yen because they are both safe havens. The pound has its own problems. The British economy is not in good shape and a hard Brexit remains a risk.”
The dollar traded at US$1.1256 (RM4.81) per euro today following a 0.2 per cent gain in the previous session.
The greenback bought 0.9493 Swiss franc, holding onto a 0.3 per cent gain yesterday.
The yen edged up to 106.86 against the dollar.
Sterling inched down to US$1.2557. Against the euro, the pound was little changed at 89.65 pence.
The onshore yuan rose slightly to 7.0735 per dollar after China’s top policymakers vowed to keep cash abundant in financial markets and further support growth.
The Australian dollar fell to a session low ofUS$0.6838, extending a pull back from a one-year high reached last week after data showed the Australian economy shed a quarter of a million jobs and the jobless rate jumped to the highest in almost two decades in May.
Across the Tasman Sea, the New Zealand dollar also fell to US$0.6447.
The yen rose against the Aussie and the kiwi , reinforcing the heightened risk aversion.
The British pound is in focus as traders brace for the Bank of England’s policy meeting later in the day.
The BOE is expected to boost its quantitative easing programme by £100 billion (RM536.3 billion), with some analysts eyeing an even larger increase amid concerns about the economic outlook.
Britain is seeking a free trade agreement with the EU, which it left on January 31, but negotiators have so far made little progress, raising the risk both sides will fail to agree a deal before a deadline at the end of the year. — Reuters
