- Stock markets hit record highs as risk sentiment improves
- New Zealand dollar jumps as rate cut no longer projected
(Adds context, updates prices)
The greenback rose to its highest against the euro in more two-years on Wednesday, as investors plowed more money into the U.S. stock market on growing optimism the economic impact of the coronavirus will be contained.
China reported its lowest number of new coronavirus cases in two weeks, bolstering a forecast by Beijing's senior medical adviser for the outbreak in the country to end by April. Still, fears of further international spread remained.
“The market is reasonably confident that China will be able to get control of the virus, although it may take some time,” said Steve Englander, head of global G10 FX research at Standard Chartered in New York.
“The fact that it just doesn’t seem to be as deadly outside of China is something that’s comforting markets,” he added.
All three major U.S. stock indexes notched record closing highs.
Investors also grew more comfortable with risk on the view that central banks are likely to provide increased accommodation if the coronavirus harms the global economy.
On Tuesday, Federal Reserve Chair Jerome Powell told Congress the U.S. economy was in a good place, even as he cited the coronavirus threat and some long-term concerns.
The dollar gained 0.26% against the Japanese yen JPY= to 110.06 yen. The euro EUR= dropped 0.41% against the greenback to bottom at $1.0863, the lowest level since May 2017. It last stood at $1.0873.
The greenback has strengthened against the euro as economic data shows a brighter economic outlook for the United States than the euro zone.
"The U.S. economic data is still superior to other economies' and the growth gap with the rest of the world remains substantial," said Ugo Lancioni, portfolio manager of the Neuberger Berman Macro Opportunities FX Fund.
Political uncertainty in Germany is an additional headwind for the single currency.
Annegret Kramp-Karrenbauer, leader of Chancellor Angela Merkel's Christian Democrats, on Monday confirmed she would not run for chancellor in next year's federal election, but said she would remain party chair until another candidate is found.
The New Zealand dollar NZD= jumped to a one-week high after the central bank removed the chance of a rate cut from its forward projections.
======================================================== Currency bid prices at 2:33PM (1933 GMT)Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid Previous Change Session Euro/Dollar EUR= $1.0869 $1.0914 -0.41% -3.04% +1.0925 +1.0866 Dollar/Yen JPY= 110.0600 109.7700 +0.26% +1.10% +110.1300 +109.7800 Euro/Yen EURJPY= 119.63 119.84 -0.18% -1.90% +120.2900 +119.6200 Dollar/Swiss CHF= 0.9782 0.9757 +0.26% +1.07% +0.9784 +0.9741 Sterling/Dollar GBP= 1.2964 1.2951 +0.10% -2.22% +1.2991 +1.2950 Dollar/Canadian CAD= 1.3251 1.3286 -0.26% +2.04% +1.3295 +1.3235 Australian/Doll AUD= 0.6736 0.6713 +0.34% -4.06% +0.6750 +0.6713 arEuro/Swiss EURCHF= 1.0633 1.0652 -0.18% -2.02% +1.0662 +1.0632 Euro/Sterling EURGBP= 0.8380 0.8425 -0.53% -0.86% +0.8432 +0.8382 NZ NZD= 0.6461 0.6401 +0.94% -4.08% +0.6487 +0.6402 Dollar/DollarDollar/Norway NOK= 9.2332 9.2480 -0.16% +5.18% +9.2496 +9.1989 Euro/Norway EURNOK= 10.0365 10.0964 -0.59% +2.02% +10.1010 +10.0337 Dollar/Sweden SEK= 9.6400 9.6358 -0.39% +3.13% +9.6455 +9.6137 Euro/Sweden EURSEK= 10.4788 10.5200 -0.39% +0.09% +10.5217 +10.4793
