By Peter Nurse
The u.s. dollar has been very popular in the european session on Thursday, the illustrations of the severity of the collapse in global economic activity has caused a flight to safe havens.
Has 10h05, the us dollar index, which tracks the greenback against a basket of six other currencies, was $ 99,965, up 0.5%, while EUR/USD fell 0.3% to 1,0871 and the GBP/USD fell 0.2% to 1,2487. USD/JPY rose 0.3% to 107,81.
The international monetary Fund forecasts that growth in Asia will stop at zero percent in 2020.
“This is the worst growth performance for almost 60 years, including during the global financial crisis (4.7%) and the asian financial crisis (1,3%),” said Chang Yong Rhee, director, Asia and Pacific department of the IMF, in a blog article.
However, it is expected that Asia does better than the other regions in terms of economic activity, he added.
This follows figures that are very low in retail sales in the United States, which fell from 8.7% in march, a record, and the weekly publication of first applications for unemployment benefits, which provides that 5.1 million more Americans will be filing an application for unemployment benefit.
“The dollar keeps its momentum after the us data yesterday,” said Kazushige Kaida, manager of exchange operations at the branch office of Tokyo at State Street.
Rising yields of Italian bonds is also interesting, after that the idea of “corona bonds” has not managed to convince the finance ministers of the EU last week. The increase in yields in the european periphery will put the euro under pressure.
Italy has been the country hardest hit by the epidemic of coronavirus in Europe, and this has brought its public finances under strain. His government, as well as the leaders of countries such as France and Spain, had suggested the idea of a debt pan-european, which would help them to pay collectively the recovery after the outbreak of coronavirus, but to no avail.
Yields on Italian 10-years are now back above 1.8%, said the Danske Bank, in a research note, the highest since the ECB started its purchase program of the emergency in the event of a pandemic.
“While Italian yields are still far below the peak reached a month ago, the sale shows that the solvency of member States is again on the radar for investors”, said the Danske Bank.
