USD regains demand with safe haven, JPY, as developments on pandemic and oil prices emerge
USD/JPY currently recovered at 107.78 from 107.50 on Thursday in Asia. What appeared to have influenced this pair’s recent dynamics are the varying runs between the pandemic and a lull in oil meltdown.
A Favorable Pause on Oil Prices Decline
The oil prices have likely sparked renewed hopes in economy and recovery in securities. An improvement in the global indexes has been prompted with the stabilized oil prices, following two days of decline.
Although Wall Street is seemingly recuperating, pleasing several traders, this is still not an indication of risk-on. Oil majors are yet to show actual efforts in sustaining investors’ confidence despite demonstrating readiness to do so.
On COVID-19 Pandemic
Virus updates stay crucial in Asia as the pandemic challenges are not yet over. Developments on South China Morning Post (SCMP) reignited anxiety of a more extensive outbreak as the Chinese presume that the virus has mutated quickly.
Thus, the dollar with haven bids attached to the S&P 500 is signaling a loss in Asia of 0.45%. Therefore, for the time being, more alleviation measures are being declared around the world.
On the flip side, hopes of economic recovery are around the corner as the curves are flattening in the US, which prompts mild ease.
USD Against Growth Currencies
While the greenback is attracting bids against growth currencies, it is still battling to keep an upside momentum versus safe havens such as JPY.
The USD/JPY pair is trading with marginal gains at 107.83, in contrast to the risk-sensitive pairs such as AUD/USD and NZD/USD, currently down at 0.40% and 0.47%, respectively.
GBP/USD recouped the 1.2300 level, however could not expand gains past it.
AUD/USD additionally progressed, yet dulled support as investors stay cautious.
As the dollar strength poses a challenge in lifting the USD/JPY pair, the Bank of Japan (BOJ) is intending to add more to its current stimulus.
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