Dollar favoured safe haven over yen amid virus fallout

Investors preferred the dollar as safe haven as the yen suffered a sudden drop, causing investors to dodge local assets.

Most currencies, from the Australian dollar to the Indian rupee were troubled as the virus’ impact caused investors to seek the dollar.

China reported fewer new infections on Thursday. However, scientists warn that the virus might spread more easily than reported as two elderlies aboard a quarantined ship in Tokyo died recently.

Despite another interest rate cut in China, the impact was still grave.

Yen’s subtle drop began on Wednesday when heavy selling caused the currency to fall against its peers.

Economic news in Japan triggered rumors that the country’s economy is already in recession. Markets showed that local assets were getting dumped by Japanese funds and shifted to gold and U.S. shares.

The USD gained its biggest in six months, at 111.38 against the yen, breaking free from the 110.30 barrier the currency held since May.

 Euro rose 1.5%, at 120.21, but stuck at 1.0798 against dollar.

The USD gained 0.3%, at 7.0215 against Chinese yuan, while Australian dollar sank to $0.6630 on its eleven-year low.