We will review the behavior of currencies in the Forex market for the week, here at CryptoTrend.
The world is not coming to an end. But there is a huge moment of global health crisis underway, the magnitude of which has not been seen in over a hundred years.
Last Friday new coronavirus cases were confirmed daily, reaching a fraction below a new historical record, with 289,329 cases.
This is a sign that globally, the virus will continue to directly affect the global economy. And therefore to the currencies in the Forex market.
Currency Behavior: The Japanese Yen
The week began with high volatility on the part of the Japanese currency, as this currency was in charge of starting the week in a big way in the Forex market.
The instability of the dollar and its free fall in its numbers in the last month, has allowed traders to focus on trading other safe-haven currencies, such as the Japanese yen.
For that session on Monday, the dollar lost 0.8% against the yen, which strengthened to a four-month high at 105.26.
Thus proving that this Asian currency, which clearly has a risk aversion character, is a safe option for investors.
The Japanese yen closed the session on Friday, July 31, trading at 105.97, further strengthening that 4-month high.
The Chinese Yuan
The Chinese currency fell against the dollar, due to increased political tensions between the two countries. This after the Chinese Foreign Ministry said the United States ordered it to close its Houston consulate, in the latest sign of mounting tensions.
These tensions increased when President Donald Trump decided on Thursday that he would ban the TikTok platform in the United States, as another proof of the American country’s discontent with the Asian giant.
The Chinese currency closed on Friday trading at its USD / CNY pair at 6.9770.
The British currency benefited from the fall of the dollar in the Forex market and it touched a maximum of 5 months until 1.30.
This fall in the currency against the Pound was due to concerns about the impact of the coronavirus pandemic in the American country, coupled with its poor control of the spread of the disease. However, it remained stable against the euro.
The pound rose to a five-month high to $ 1.3170, close to its pre-coronavirus levels for the week. And this Friday it closed its listing at 1.3085, maintaining a good upward pace.
The Euro, the currency with the best performance
The euro continued its rise after European Union leaders agreed on a € 750bn fiscal stimulus plan last week.
However, there are warnings that the danger to the euro zone economy is not yet over.
The euro reached a new high of $ 1.1910, its highest level since September 2018. Finally, the European currency closed at its EUR / USD pair at 1.1765 on Friday, maintaining its bullish range for the week.
The free fall of the dollar continues to be the news on everyone’s lips. The early improvement of the dollar seems not yet to be close.
Well, with the political tensions in the United States increasing, the little control of the government in restraining the coronavirus, and the null advance in the parliamentary agreements for economic arrangements, these are just some of the factors that have generated this behavior of the dollar.
The currency even posted a two-year low, its lowest performance drop in a long time.
And, although expectations are set for a possible rise after the American unemployment figures are published next Friday, many analysts believe that this will not be enough to allow the dollar to recover.
The dollar index closed the session on Friday trading at 93.44, keeping its performance low.