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Investors focus on safe-haven currencies amid covid concerns

Investors focus on safe-haven currencies amid covid concerns

As the global situation with the coronavirus pandemic worsens we are seeing a risk aversion mood in the markets. Investors are moving towards currencies which are perceived as ‘safer’ such as the yen and moving away from high yielding commodity currencies. This has caused the Canadian, Australian and New Zealand Dollar to weaken.

Data wise there is not much to move the market this week, until the ECB meet on Thursday – we therefore imagine the market will be moved largely by the pandemic and the reactions to it.

In the UK, bars, theatres, nightclubs and sporting events will open up as part of the so-called ‘freedom day’. Face coverings will be recommended in some spaces, but not required by law. The reaction from the Pound has so far been fairly mute but if we see a successful reopening with covid hospilisations not spiking then we should see some Sterling strength as the UK economy begins to recover.

 

Here are some highlights for the week:

  • Monday: UK Rightmove house price index; US NAHB housing index.

  • Tuesday: Japan CPI core; RBA minutes; Swiss trade balance; Germany PPI; Eurozone current account; US housing starts and building permits.

  • Wednesday: BoJ minutes, Japan trade balance; Australia retail sales; UK public sector net borrowing; Canada new housing price index.

  • Thursday: Australia goods trade balance, NAB quarterly business confidence; ECB rate decision; US jobless claims, existing home sales.

  • Friday: Australia PMIs; UK Gfk consumer confidence, retail sales, PMIs; Eurozone PMIs; Canada retail sales; US PMIs.

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