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Two-week high for USDJPY in forex markets

Denise Jackson

The US dollar appeared to have come close to its highest point in two weeks on Friday after a high degree of confidence in the country’s economy was revealed.

The US dollar was trading at 109.97 in its pair with the Japanese yen as trading got underway in Asia on Friday.

This came after a significant milestone for the currency, as its fortnightly high point was hit just before.

Across the course of the whole week, the greenback appeared set to go up by a percentage point and a half in its pair with the yen – which has, in turn, suffered as traders appeared to move away from the need for safe haven currencies.

If this transpires, it will represent the highest weekly surge for the currency since summer 2018.

This was largely due to the receding fears about the Chinese coronavirus.

Although there has still been little in the way of certainty about the progress of the virus and the impact it could be having on the Chinese economy, markets have been buoyed by the support China has received from groups like the World Health Organisation.

However, the greenback’s rise had complicated reasons behind it.

It also happened because of a positive feeling about domestic US economic data.

It was revealed on Thursday, for example, that claims of out-of-work welfare payments in the US had gone down to their lowest point in nine months.

It was also shown that productivity levels in the American workforce were up too.

Elsewhere, the offshore version of the Chinese yuan – which is traded globally rather than domestically in China – managed to hold firm in its pair against the US dollar.

It was spotted at 6.9790.

While the currency may be holding firm for now, analysts predicted that there could be some problems when economic data covering the Asian region in the month of February is released.

When that arrives, the true level of the economic impact of the coronavirus could be made clear.

The Swiss franc had a bad day, following the trend of its fellow safe haven and Japanese counterpart the yen.

It was preparing to bow out of the week at 0.9747 in its pair against the US dollar, which – if it occurs – will be the worst weekly drop for the currency since the summer of last year.

The British pound is also suffering at the moment.

Despite the fact that the country quit the European Union formally last week, the issues around Brexit are far from over.

The next hurdle for the country will be negotiating a trade deal to apply from 2021 onwards, when the UK will no longer be covered by EU rules as part of a transition period.

This has to happen over the course of 2020, although there is some concern among traders that Boris Johnson – the country’s prime minister – may play hardball.

In its pair with the single European currency, the pound was down by just over an entire percentage point over the course of the week.

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Denise Jackson
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