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Forex Market: Dollar Takes a Hit from Possible Coronavirus Rebound

The USD and JPY are the winning currencies in today’s forex market session. The greenback is pushing the euro to 1.1220. The Japanese currency is approaching the key support level of 106.55.

On the other hand, the dollar pierces the GBP’s key support at 1.25, trading at 1.2427 at the time of writing. This comes after the UK kept its money price unchanged at 0.1%.

In terms of safe-haven assets, Gold is down 0.14% against the dollar to US$1,724, while Bitcoin is trading at US$9,393, down 0.53%.

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Forex Market Analysis: Dollar, Yen and Norwegian Kroner the Winners
The U.S. dollar and Japanese yen held their positions today on concerns of a rise in new cases of coronavirus that supported the demand for safe haven currencies. In this scenario the Norwegian krone is the star.

The krona moved the most among the major currencies, rising after Crypto Trader said the country’s economic outlook had improved more than expected in recent weeks, and that its interest rate would remain unchanged for now, Reuters reported.

The krona „seems to be ticking almost all the boxes at the moment,“ said Adrian Owens, manager of foreign exchange and fixed income portfolios at the GAM hedge fund. He also noted that „economic numbers are coming out better in Norway and the central bank is becoming more aggressive.

Norway is one of the few countries in the world where inflation is expected to remain around the target, which supports the currency, Owens said.

The Norwegian krone rose 0.6% against the dollar to NOK 9.4560 and 0.5% against the euro to 10.6430.

Graph of the last month of the Norwegian Kroner

Graph of last month of the Norwegian Crown
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The Coronavirus is relentless
„The foreign exchange markets have a moderate risk overnight, with a light news flow. Beyond the continuing concerns of a second wave of COVID-19, the poor performance of AUD and NZD is compounded by weak internal data,“ said Adam Cole, chief currency strategist at RBC Capital Markets.

More than 8.36 million people are reported to be infected with the new coronavirus worldwide and 447,985 have died, according to a Reuters count.

An increase in new coronavirus infections in several U.S. states and the imposition of travel restrictions in Beijing to stop a new outbreak there have served as a reminder of the risks of reopening economic activity before a vaccine is developed.

The Australian dollar fell after data showed the economy shed twice as many jobs as expected in May, highlighting the damage caused by the closure restrictions.