The dollar is falling in anticipation of more US monetary easing
Economy News _ Baghdad
The dollar fell on Thursday after the US Federal Reserve left the door open for more monetary easing and eased expectations for a rapid economic recovery from the Corona virus crisis.
The US currency fell due to indications that the pandemic was ebbing in other countries and thanks to the demand for the dollar as a safe haven. The appetite for some high-risk assets has been boosted by positive results from a possible drug test to treat Covid-19 disease.
The euro weakened ahead of a European Central Bank meeting later on Thursday as policymakers are likely to expand debt purchases to include high-risk bonds and take new steps to ease conditions in the credit markets.
The Chinese currency hit a two-week high, amid hopes for possible treatment for the virus. The data also predicts that the world's second largest economy is slowly recovering from a sharp drop in activity due to the Corona virus, though its path seems bumpy.
More countries are taking steps to reopen economies as the rate of HIV infection slows, which gives grounds for optimism.
But it is likely that it will take several months for US consumer spending to fully recover due to the sharp job losses, which has prevented any heavy buying of the dollar.
“The Fed has already made a huge easing, but saying that it is ready to do more has taken its toll on the dollar,” said Minori Uchida, director of global market research at MFFJ in Tokyo.
“I expect the USD / JPY to retreat. The euro may benefit from a weaker dollar unless the eurozone government bond margins expand greatly. ”
The dollar fell slightly to 106.50 yen on Thursday, approaching a six-week low.
In front of the British pound, the US currency recorded $ 1.2480, after falling by 0.3 percent on Wednesday.
The dollar held little changed at CHF 0.9744.
The euro fell slightly to $ 1.0866 on Thursday. The single currency fell 0.26 percent against sterling to 87.08 pence.
The Australian dollar rose to a seven-week high of $ 0.6565, indicating an improvement in risk appetite among some investors.
The currency benefits from Australia's success in containing the virus.
The New Zealand dollar hit six-week highs as economic activity resumed after one of the world's most stringent closings to tackle the Corona virus ended.