Coronavirus pandemic reallocates forces in global foreign exchange markets
Investors seek for a safe haven and shift to places where coronavirus already culminated.
Japanese yen grew in 2% against US dollar on Monday. Investors react to interest rates cuts implemented by the Fed. Moreover, the growth was supported by investors seeking for short-term investment safe haven. While the US expect coronavirus outbreak, the situation in Japan seems to be improving.
Yet, the situation on euro-dollar market signals the opposite. Euro slightly dropped against US dollar, similarly to British pound or Czech crown. Pound appears in 5-month lows against dollar. Investors seem not to be discouraged by asset relocation from pound to dollar or rapid interest rate cuts.
Czech crown also fell against dollar. A week ago, the exchange rate was 22,50 CZK for 1 USD. On Monday, crown plunged in almost 4% over the level of 24 CZK against 1 USD. Moreover, Czech crown experienced similar progress against euro. The drop does not necessary concern emergency interest rate cuts by the Czech National Bank, but generally decline of investors‘ trust to emerging markets.