admin On Monday, the dollar hit a four-month high against the euro as concerns about the coronavirus increased demand for safe ports, whereas economic outlook for the U.S. economy and weak data in the eurozone made the investors more attracted towards Dollar.
The spreading virus will dent the global economic outlook and investors are concerned about it.
According to data on Friday showed that U.S. job growth accelerated in January and relatively strong economic data in the United States is also attracting investor than other currencies.
This data also revealed that in December, Italian industrial output was much weaker than expected.
Global head of currency strategy at Brown Brothers Harriman in New York, Win Thin said, “We had much stronger than expected U.S. data, coupled with much weaker than expected eurozone data”.
Statement further added, “At the same time, we have the safe haven bid from the coronavirus. That is killing EM and really benefiting the dollar, and to a lesser extent the yen and Swiss.”
On Monday leader of Chancellor Angela Merkel’s Christian Democrats (CDU) Annegret Kramp-Karrenbauer confirmed she would not run for chancellor in next year’s federal election, this political uncertainty in Germany is an additional headwind for the euro. But Annegret Kramp-Karrenbauer added that she would remain party chair until another candidate is found. The British pound dropped to a two-month low of $1.2870 before rebounding to $1.2938 and the Australian dollar sank to $0.6656, the lowest since 2009, before gaining back to $0.6682. Australias economy is highly correlated to Chinas whereas the euro fell to a four-month low of $1.0925.
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