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Tuesday, November 30, 2021

Yen recovers, rand and Australian stumble as new variant propels flight to safety

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OTTAWA – The safe-haven yen rallied as

the South African rand and the risk-sensitive Australian dollar

tumbled on Friday as investors ducked for cover after the

discovery of a new variant of coronavirus that could withstand the current

vaccines.

The yen jumped as much as 0.64% to 114,595 per

dollar, and its fellow refugee the Swiss franc rose so much

as 0.33% to 0.9330 per dollar after South African scientists

discovered variant B.1.1.529 spreading in the country. the

variant has a group of mutations that can help it evade

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body’s immune response and make it more transmissible. Have

since then it has been found in Botswana and Hong Kong.

The rand fell 1.62% over a year.

at 16.24 per dollar, while the Australian and the new

Zeeland dollars fell to three-month lows at $ 0.7135

and $ 0.6818, respectively.

“COVID concerns definitely play a role in the increase

The demand for safe havens, including the yen, and why the south

Africa is the location of this new variant, that’s obvious

reason to avoid the rand, “said Shinichiro Kadota, senior FX

Barclays strategist in Tokyo.

Britain was quick to introduce travel restrictions in the south

Africa and neighboring Botswana, Namibia, Zimbabwe, Lesotho and

Eswatini. The British pound fell to a new 11-month low of

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$ 1.3299.

However, the euro was up 0.15% to $ 1.1222,

bouncing back after hitting its lowest level in nearly 17 months prior

in the week at $ 1.1186. Germany is considering the following

Austria and the re-imposition of a COVID-19 blockade with the

continent once again the epicenter of the pandemic.

Yen, franc and euro gains boosted the dollar index

– what the dollar measures against those and three

other currencies – further from Wednesday’s 96,938, its

highest in almost 17 months. It was last traded at 96,707

But the index continued to climb 0.72% on the week, still on track

for its fifth consecutive weekly advance.

Traders have raised the stakes that an increasingly aggressive market

The Federal Reserve will raise rates in the middle of next year,

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while central banks in Europe, Japan, and elsewhere are sticking to more

docile postures.

“If the COVID situation worsens, then the dollar-yen could disappear

down even further, but otherwise the monetary policy divergence is

it will definitely weigh on the yen in the medium term “,

said Kadota, who predicts that the dollar-yen will strengthen to 116 and

further in the middle of next year.

On the other hand, 114 should provide a floor for the

currency pair in the short term, “unless the world actually changes

for the worse, ”he said.

Last week, Bank of Japan Governor Haruhiko Kuroda reiterated

his commitment to massive monetary stimulus, adding that the

The central bank is willing to increase it further if necessary.

During the night, minutes from the month of October from the European Central Bank.

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The meeting showed that the majority of policy makers were leaning towards the continuation

encouragement and a cautious approach to any policy change, despite

the heated inflation pressure.

By contrast, money markets are pricing in a Fed rate hike.

in July, with a good chance of arriving in June.

A potentially crucial indicator for the direction of US policy is

It expires next Friday, with the publication of monthly payroll figures.

“In the medium term, we continue to favor the USD”, Jane Foley,

Rabobank’s senior currency strategist, wrote in a research note.

“However, with the market now long USD and short EUR and the

money market positioned very aggressively for Fed rate hikes

next year, there is scope for pullbacks in the currency pair “,

with $ 1.15 a potential target, and payrolls report a

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potential trigger, he said.

============================================== == ======================== ======

Currency offer prices at 0451 GMT

RIC Description Last US Closing Percentage Change

Previous change

session

Euro / Dollar $ 1.1222 $ 1.1206 + 0.15% -8.15% +1.1227 +1.1206

Dollar / Yen 114.7150 115.3700 -0.62% + 11.01% +115.3150 +114.6050

Euro / yen

Dollar / Swiss 0.9328 0.9356 -0.28% + 5.46% +0.9359 +0.9330

Pound sterling / Dollar 1.3305 1.3318 -0.08% -2.60% +1.3322 +1.3299

Dollar / Canadian 1.2712 1.2646 + 0.55% -0.15% +1.2714 +1.2650

Aussie / dollar 0.7141 0.7186 -0.61% -7.16% +0.7190 +0.7135

NZ 0.6825 0.6854 -0.36% -4.91% +0.6856 +0.6818

Dollar / dollar

All the places

Tokyo locations

Spots of europe

Volatilities

BOJ Tokyo Forex Market Information

(Editing by Ana Nicolaci da Costa and Jacqueline Wong)

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