Never miss another update
LONDON (Reuters) – The U.S. dollar and Japanese yen held their positions on Thursday as concerns about a rise in new coronavirus cases underpinned demand for safe-haven currencies, while the Norwegian crown was a star performer.
FILE PHOTO: U.S. dollar notes are seen in this November 7, 2016 picture illustration. Picture taken November 7. REUTERS/Dado Ruvic/Illustration
The crown was the biggest mover among major currencies, rising after Norway’s central bank said the country’s economic prospects had improved more than expected in recent weeks and that its key policy interest rate would be kept unchanged for the time being.
The crown “seems to be ticking pretty much all the boxes at the moment”, said Adrian Owens, currency and fixed income portfolio manager at hedge fund GAM, noting that the economic “numbers are coming out better in Norway and the central bank (is) acknowledging this and becoming more hawkish.”
Norway is one of the few countries in the world where inflation is expected to remain around target, supporting the currency, Owens said.
The Norwegian crown was up 0.6% versus the dollar at 9.4560 NOK=D3 and by 0.5% versus the euro at 10.6430 EURNOK=D3.
An index tracking the dollar against a basket of currencies =USD was unchanged at 97.09. The dollar has strengthened in recent weeks as investors grappled with fears that the COVID-19 pandemic’s impact on economic growth.
The Japanese yen was last trading neutral at 107 JPY=EBS after touching a six-day high of 106.70 in the Asian trading session. It remained close to the one-month high of 106.58 it rose to last week.
“FX markets are mildly risk-off overnight, with only light news flow. Beyond continuing concerns of a COVID-19 second wave, AUD and NZD underperformance is being compounded by weak domestic data,” said Adam Cole, chief currency strategist at RBC Capital Markets.
More than 8.36 million people have been reported to be infected by the novel coronavirus globally and 447,985 have died, a Reuters tally found.
A surge in new coronavirus infections in several U.S. states and the imposition of travel curbs in Beijing to stop a new outbreak there have served as a reminder of the risks of re-opening economic activity before a vaccine has been developed.
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.
The Aussie dollar was last flat at 0.6882, having fallen earlier to 0.6838 AUD=D4.
The euro was also little changed against the greenback, at $1.1250 EUR=EBS.
The common currency has lost nearly 1% of its value in less than a week as investors questioned whether the European Union would be able to pass an ambitious stimulus plan proposed by the European Commission, given that some countries are opposed to handing out aid as grants.
“It would seem as if euro/dollar has found its new comfort zone in the area of 1.12-1.14. Only the political front might provide some momentum,” said Thu Lan Nguyen, a currency analyst at Commerzbank.
Elsewhere, the British pound was trading 0.2% lower both against the U.S. dollar and the euro, at $1.2518 GBP=D3 and 89.75 pence EURGBP=D3 respectively, following the Bank of England announcement on rebuilding its war-chest for fighting the coronavirus crisis.
Reporting by Olga Cotaga; Editing by Barbara Lewis and Pravin Char
This article was first published at http://feeds.reuters.com/~r/reuters/businessNews/~3/d8klSF7YSs8/dollar-and-yen-supported-by-fears-of-new-pandemic-wave-norways-crown-shines-idUSKBN23P02Q