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Forex – Yen Tumbles, U.S. Dollar Rises as Trump Readies “Very Substantial Relief”

imageForex14 hours ago (Mar 10, 2020 01:34AM ET)

(C) Reuters.

By Alex Ho

Investing.com – The Japanese yen tumbled against the U.S. dollar following reports that President Donald Trump will soon announce easing measures to support the economy.

The USD/JPY pair jumped 2.6% to 104.91 by 12:30 AM ET (04:30 GMT).

Japanese Prime Minister Shinzo Abe said the government will work closely with the Bank of Japan to support the “very unstable” markets.

“Markets are making nervous movements amid uncertainty over the global economic outlook. Based on agreements made among G7 and G20 nations, the government will work closely with the BOJ and authorities of other countries to respond appropriately,” Abe said in a meeting with ruling party executives on Tuesday.

The U.S. dollar index that tracks the greenback against a basket of other currencies was up 1.1% to 95.885.

Overnight, Trump said he plans to unveil “very substantial relief”, including payroll-tax cuts, amid the spreading coronavirus.

However, Traders remained on edge amid growing concerns about the economic impact of the virus and a sharp plunge in oil prices after Saudi Arabia and Russia threaten to begin a price war.

On the coronavirus front, The World Health Organization (WHO) said the threat of a pandemic is “very real,” although there seems to be signs that countries including China and Singapore have largely controlled the virus spreading.

WHO cautioned that “In many countries, it will get worse before it gets better.”

In Europe, the number of cases in Italy soared by 25% to 9,172 on Monday, while cases in Spain almost doubled. Germany reported its first two deaths.

Globally, confirmed cases surpassed 110,000, and deaths exceeded 3,800, according to the latest figures released by WHO.

The USD/CNY pair traded 0.2% lower to 6.9298. Data today showed producer prices in the country fell 0.4% from a year earlier, compared with the expectations of a 0.3% drop.

Consumer prices rose 5.2% as compared to a year earlier, in line with forecasts.

The GBP/USD pair was down 0.6% to 1.3049 as traders await the upcoming UK budget.

“There’s a lot of optimism about the impact of this week’s UK budget, which appears likely to be coordinated with a round of interest rate cuts,” said Marshall Gittler, head of investment research at BDSwiss Group.”The rate cuts don’t necessarily have to be negative for sterling if the market believes that they’re likely to bring about faster-than-expected growth.”

Forex – Yen Tumbles, U.S. Dollar Rises as Trump Readies “Very Substantial Relief”

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