The U.S dollar reversed its losses on Wednesday in Asia as investors flock to safe havens amid increasing numbers of fatalities from the COVID-19 pandemic.
New York state and the United Kingdom announced their highest daily death toll overnight, despite the falling number of cases reported in the beginning of the week. New York governor Andrew Cuomo reported 5.489 deaths in the state overnight.
The U.S. Dollar Index , which tracks the greenback against a basket of other currencies, gained 0.34% to 100.257 by 11:50 AM ET (4:50 AM GMT).
“Risk aversion and the U.S. dollar are going hand in hand,” said Ray Attrill, head of FX strategy at National Australia Bank, told CNBC. “Improvement has been based on less-bad statistics coming out of various parts of the world...but our view is that markets are going to remain choppy - we can’t expect an uninterrupted flow of singularly good or singularly bad news,” he added.
- The USD/JPY pair was down 0.11% to 108.83 as Prime Minister Shinzo Abe officially announced a state of emergency overnight.
- The GBP/USD pair lost 0.16% to 1.2317 as Prime Minister Boris Johnson entered his second day in intensive care to treat the virus.
- The AUD/USD pair slid 0.61% to 0.6129 as S&P downgraded its outlook on the country's sovereign AAA rating from stable to negative.
- The NZD/USD pair was down 0.37 % to 0.5952 whilst the USD/CNY pair gained 0.35% to 7.0671.
“While the virus’ curve is flattening, the economic effects of the corona crisis will linger for years,” Joe Capurso, Commonwealth Bank of Australia currency analyst, told CNBC. “Economies will take time to re-open, some businesses will not re-open, and unemployment will take years to (recover). We think that means the dollar and yen will re-strengthen,” he said.