Forex Market: Japanese Yen Strong as Week Ends
The Japanese yen is gaining strength after a week in which the dollar lost ground against other currencies. It’s time for the Yen to rebound.
Currencies such as the Bitcoin Storm, the Euro and now the Japanese Yen have all rebounded in the forex market above the Dollar as investors begin to find security in currencies other than the Dollar.
The U.S. currency is increasingly being downgraded against other currencies as the U.S. economy is undergoing a major turnaround. Analysts believe that the dollar will have an uphill battle to regain its former position.
Can the Yuan displace the Dollar as a safe-haven?
Why has the Dollar lost ground?
The news from the Forex market has been full of scoops this week about the rise of currencies other than the Dollar. And this was a scenario that analysts predicted.
Since the beginning of the coronavirus pandemic, the U.S. has been one of the countries that has taken the least measures to control its infections and curb the spread of the coronavirus.
To date, there are 3.7M confirmed cases in the United States.
More than 60,000 new cases of COVID-19 were reported across the United States on Thursday, the highest single-day count by any country in the global pandemic so far, discouraging some U.S. consumers from returning to public spaces.
This has led investors to tread carefully when considering investing in the dollar.
Well, the greenback had become a safe haven for investors at the start of the pandemic, but as other economies gradually recover, the dollar is slowly being displaced.
The renewed strength of the Japanese Yen
The Japanese yen is strengthening, and is now on track for its biggest daily percentage gain against the dollar in about a month. It is one of the currencies that made a comeback in the Forex market due to the weakness of the dollar.
The USD has fallen against a basket of major currencies. The fall was due to a weaker than expected U.S. economy for investors.
After the release of the Japanese and U.S. Producer Price Index statistics, the Japanese Yen gained against the U.S. Dollar due to the clear advantage of the Yen over the U.S. Dollar, changing the direction of investor interest.
Japanese data showed that PPI rose by 0.6% in June after falling by 0.5% in the previous month. Prices fell by 1.6% year-on-year.
This is understandable because there was no pandemic in 2019. These figures came a few days before the Bank of Japan’s (BoJ) interest rate decision.
US PPI data remained negative at -0.8%, failing to meet analysts‘ expectations and generating even more uncertainty for investors as the US currency appears to be approaching a non-investment friendly environment.
„Growth concerns have been lurking in the markets, driving safe havens such as the yen and gold.
Joe Manimbo, senior market analyst, at Western Union Business Solutions in Washington