Forex: The Dollar folds in the face of the major currencies EUR, GBP and JPY

By Geoffrey Smith

The dollar was mixed Friday, falling after reaching record highs against the yen, the euro and the british pound, but rose again in the face of emerging currencies.

At 12.45 pm, the dollar index, which tracks the greenback against a basket of currencies developed, was down 0.2% at 99,62, after having reached its highest level in nearly three years Thursday.

However, this represents only a modest pullback after an increase of almost 4% during the weeks that followed the outbreak of sars coronavirus in China.

USD/JPY, which had crossed the 112 for the first time since April on Thursday, has lost 0.25% to 111,83.

EUR/USD reached its lowest level in three years earlier this week, rebounded strongly to 1,0820$ after the purchasing managers ‘ indexes flash French and German for February are out higher than expected. The analyst group’s AFS, Arne Petimezas, stressed that the numbers of germans were “less than stellar under the hood”, given the weakness of new export orders.

The yen’s decline occurred despite a further decline in PMI manufacturing and services.

Paul Donovan, chief economist at UBS Wealth Management in London, warned that the PMI surveys have tended to overstate actual changes, given the mood swings of the survey respondents.

“There is a very good possibility that the polls reflect the cycle of the economic news more than they do not reflect the reality,” said Donovan in a podcast early in the morning.

It should also be noted later, the figures of loans from the United Kingdom in the public sector, the last to be published before the annual budget of the new government in march. The ouster of the head of the Treasury, Sajid Javid, combined with the flow of news since then, has increased the expectations of a large widening of the fiscal deficit, which would argue against a new lower interest rate of the Bank of England.

The british pound has increased from 0.35% to 1,2925$.

During the night, the dollar continued to advance against the asian currencies, reflecting expectations that the slowdown of the chinese economy will hit more than anywhere else in Japan, Indonesia and Thailand.

The dollar has also reached its highest level for more than a year in the face of the Turkish lira, while the country’s fight against growing instability on its southern border with Syria.

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