- Coronavirus Fears and Strong Economic Data Help USD Rally to the Top of the Currency Rankings
- What Will USD Face Next Week?
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The US dollar has had a very strong week this week. It started the week in a positive position as it continued to benefit as a safe haven currency amid the coronavirus outbreak fears. As the week progressed, USD appeared to take each data release in its stride as it quickly earned itself the top performer of the week title. It brushed aside many of its challenges including manufacturing PMIs, factory orders, services and non-manufacturing PMIs. With positive news to end the week on Friday in the form of nonfarm payrolls and average hourly earnings both showing an uptick in values, USD looks ahead to next week to continue its fine form.
This week has been kind to USD. The fears of the coronavirus kept USD in demand as many investors flocked to the currency as a safe haven currency. The strength of USD was helped due to the other safe haven currencies including in the Japanese Yen and the Swiss Franc being closely linked to China through trade – where the virus originated. The US dollar was also sky rocketed through a series of positive economic releases which have returned values in favour of the currency. With rises in manufacturing PMIs, factory orders, services PMIs and non-manufacturing PMIs the United States’ economy looks to be booming. Friday saw the release of the US nonfarm payrolls and average hourly earning which both came in well above predictions to cap off a positive week as a whole for the US dollar. The currency is likely to carry the momentum through the weekend and see it start the next trading week on the front-foot over its rivals.
As mentioned, USD will start the week with the upper-hand against its rival currencies. Investors will keep an eye on the coronavirus headlines as the latter stage of this week revealed that Chinese researchers noted that they had found a breakthrough drug, effective in the treatment of the disease. This got investors hopes up and reduced the fear around the disease, allowing investors to return from the safe haven USD to more risk-sensitive currencies like AUD and CAD. Should any further developments arise around a vaccine or ‘cure’ then USD will likely decline. For data releases next week, USD will see its consumer price indexes released which have been tipped to rise. Should this be the case USD will likely continue its winning streak that it has displayed this week.
If you would like to learn more about factors influencing GBP/USD exchange rates for an upcoming currency transfer, feel free to contact myself, Jonathan Watson, using the form below.