By Administrator_India
The dollar held gains against the yen on Wednesday amid a broad unwinding of safe-haven positions as China’s responses to the coronavirus outbreak supported investor confidence, even as deaths and new cases climbed.
The Coronavirus outbreak claimed its first life in Hong Kong on Tuesday, as the mainland China death toll rose by 65 to 490 and the number of cases rose to 24,324.
Against the rising death toll, however, the World Health Organisation said it remains possible to contain the virus’ spread. Some 99% of cases are in China, which has responded with drastic quarantine measures and the injection of 1.7 trillion yuan ($243 billion) into the financial system.
Reuters reported on Wednesday that more stimulus is likely to follow. Those broader expectations of economic support as well as recent measures prompted investors to partly reverse the flight to safety seen over the past two weeks.
Gold tumbled, the Japanese yen had its worst session against the dollar in nearly six months and the Dow Jones stock index posted its biggest daily gain since August in overnight trade.
However, the yen, seen as a haven by virtue of Japan’s position as the world’s largest creditor, halted its decline by morning, suggesting investors are still cautious.
It last traded just above a 1-1/2 week low at 109.43 per dollar . The trade-exposed Australian dollar , by contrast, bounced 0.7% on Tuesday from not far above a decade low to its highest in a week. It last stood at $0.6733.
“Investors want to see some actual stabilisation in cases and an improvements in recovered people before rallying again,” J.P. Morgan analysts wrote in note.
“As long as we don’t see this in numbers, it feels like the rally should be faded.”
In offshore trade, the Chinese yuan held overnight gains and stayed on the strong side of 7-per-dollar at 6.9943. The New Zealand dollar steadied at $0.6486.
