TOKYO (Reuters) – The dollar, the hero gains against most major currencies on Thursday after U. s. President of the federal Reserve, and Jerome Powell, dismissed speculation policy makers to adopt a negative interest rate.
FILE PHOTO: U. s. dollar notes, in this November 7, 2016, and the image of the illustration. This Photo was taken on November 7. REUTERS/Dado Ruvic/Illustration
The Australian dollar was under pressure before the closely-watched data on the job market, which can help to determine how much more monetary and fiscal easing is necessary to support the economy.
The focus will be on economic data out of the united States and Europe in the next two days for more clues on the depth of the downturn, there was, for a time, investors will closely monitor China’s activity gauges for signs on how long it can take to get out of the brutal caused by the epidemic of the virus corona.
“The dollar has managed to bounce back after Powell, the negative comments of the rates, but now that the dollar bias is neutral enough,” said Takuya Kanda, director general of the research department Gaitame.com Research Institute, Tokyo, japan.
“It might be safe-have flows in dollars, but everyone is facing the same economic problems caused by the corona virus.”
The dollar traded at $1.0818 against the euro on Thursday, following a 0.3% gain in the previous session.
Against the pound sterling, the dollar was quoted at $1.2238, near a five-week high.
The dollar bought 0.9722, Swiss franc, after a 0.3% gain Tuesday.
The usd was little changed at 106.91 yen.
Powell became the latest in a parade of policy-makers to push the idea that they could push the rate into negative territory, after the Fed futures traders began pricing a small chance of sub-zero, U. s. technologies within the next year.
“The opinion of the committee on a negative rate has not really changed. This is not something that we are looking at,” Powell said Wednesday, referring to the Fed’s policy-setting Federal Open Market Committee.
Powell spoke in response to a question after delivering a bleak assessment of the U. S. economic outlook, in a closely-watched speech.
In the united States and other countries are easing restrictions to allow the factories and the shops to be open again for business, but there are significant risks of a second wave of infections, and a full-fledged economic recovery is expected to remain away until a vaccine for the corona virus is available.
U. s. data on weekly jobless claims later on Thursday, and a survey of U. s. manufacture due to Play croatia has to offer more clues on the economic outlook.
The Australian dollar fell slightly to $0.6449 as traders ready for data at 0130 GMT is expected to a sharp increase in unemployment (Reuters poll forecast of 575 000) due to the corona virus of the pandemic, which would reinforce expectations of stimulus measures.
Across the Tasman, the New Zealand dollar traded at $0.5991. The kiwi has fallen more than 1% on Tuesday after the Reserve Bank of New Zealand pointed out the possibility of negative interest rates.
The New Zealand government is expected to present its budget later today, who will sacrifice a fiscal stimulus to offset the economic damage caused by the pandemic.
Many investors are waiting for the China of the release on Friday of data on industrial production, retail sales and investment, is to measure the speed with which the world’s second-largest economy is recovering from its first contraction in decades in the first quarter.
The novel corona virus has appeared in China late last year and has since spread worldwide, paralyzing economic activity.
Trading in the euro, we are also focused on the release of preliminary first quarter gross domestic product data on Friday, in order to assess the extent of damage caused by the epidemic.
Reporting by Stanley White; Editing by Kim Coghill