Forex - Dollar Racks up Gains Against Yen as Safe-Haven Bid Fades
Investing.com
Published Feb 04, 2020 02:04PM ET
By Yasin Ebrahim
Invesing.com – The dollar extended gains Tuesday, underpinned by stronger-than-expected U.S. economic data and strong gains against the yen on fading safe-haven demand as coronavirus fears eased.
The U.S. dollar index, which measures the greenback against a trade-weighted basket of six major currencies, rose by 0.15% to 97.80.
Factory goods orders rose 1.8% in December, topping economists' forecasts for a 1.2% rise, marking the largest gain since August 2018.
Factory orders for the month were driven by strong demand for defense aircraft, but weak capital expenditure kept gains in check.
The dollar racked up gains against the risk-averse yen and Swiss franc as investors ditched safe havens on easing fears about the coronavirus impact on global economic following fresh stimulus measures from China.
USD/JPY rose 0.77% to Y109.51 and USD/CHF gained 0.41% to 0.9697.
GBP/USD rose 0.37% $1.3041, clawing back some of its losses from a day earlier, on economic data showing better-than-expected construction activity in January.
The rise in the pound comes despite ongoing worries that the U.K. and EU may be headed for a clash on trade
If the U.K economy fails to recover as expected and U.K.-EU trade deal talks fall through, GBP/USD could fall to between 1.2000 and 1.2500, MUFG's Lee Hardman said.
EUR/USD fell 0.15% to $1.1041.
USD/CAD fell 0.12% to C$1.3268 as the loonie was pressured by a fall in oil prices despite hopes that OPEC will cut production further to stem the impact from the coronavirus on Chinese oil demand.
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