JP Morgan Predicts Shrink in US Economy, JPY Aims Higher Amid Possible Recession Worries
According to banking giant JP Morgan, the US economy is predicted to have a 40% shrink in its economy between the months of April and June due to the effects of the spread of the Coronavirus.
Having already surpassed Italy’s mortality rate, the US has recorded a total of 21,000 deaths as per news records from NBC. The 40% shrink in the US economy will also force around 25 million people to lose their jobs due to slow downs in business operations amid worsening outbreak conditions.
On the other side of the coin, the anti-risk Japanese Yen has been making gains at the opening of the Asian session. The JPY also seems to have a bullish outlook with the IMF outlook. The JPY may improve if the IMF’s global economic evaluation shows the possibility of a recession along with unstable credit conditions.
The JPY has been known to be a safe haven to investors during economic crises such as this one so it’s no surprise that recession woes may drive the investors toward the Yen.
With economic news favoring the JPY, USD/JPY saw a drop in gains during the start of the session. However, the USD bulls are challenging the surge of bears at the 108 price level. This psychological support may push the price of USD/JPY slightly higher within the day if the bulls overtake the bears.
USD prices may also be affected by the release of Retail Sales and Core Retail Sales data that will be coming out sometime in the middle of the week.
So far, the price has been in favor of the JPY with the bears still in control. Price will reach even lower once USD/JPY breaks out of the 108 support level which is something that we may expect during the day.
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