Demand for Safe-Haven Currencies Is Growing amid Lockdowns in the US and Europe

The Japanese yen is growing amid a sharp rise in demand for the safe-haven currency. Investors are concerned about tightening economic restrictions in the United States and Europe.

The increase in the number of new diseases has led to record hospitalizations and new lockdowns in the US. There are new coronavirus outbreaks in Japan, South Korea and Australia. We recommend trading currency pairs with JPY only on corrections from important price levels.

On Tuesday, macroeconomic data showed a slowdown in US retail sales growth to 0.3% in October from 1.6% in September. President of the Federal Reserve Bank of Atlanta, Raphael Bostic, noted that statistics in the fourth quarter might be weak compared to the solid recovery that began in May and was observed in the summer. "The retail sales number gives us a sign, but there are lots of other things that we’re going to learn between now and then and that will give us some guidance as to how we should think about our next move in terms of assets," he told CNBC.

Meanwhile, Fed Chairman Jerome Powell said that the growth of coronavirus incidence would pose a serious risk to the economy in the coming months. Also, the head of the Fed said on Tuesday that the economic recovery "has a long way to go."

The oil was under pressure due to data on API weekly crude stock. According to data, oil inventories in the United States increased by 4.2 million barrels on November 7-13, greater than analysts forecasted. Analysts also forecast that oil inventories may be increased up to 1.2 million barrels. This may be the reason for the further fall in oil prices. Currently, the price of WTI oil is $41.56.

Market indicators

The US stock market fell on Tuesday after a rally the day before amid news of the successful trials of another coronavirus vaccine. The Dow Jones Industrial Average dropped by 167.09 points (0.56%) and counted to 29783.35 points.

Standard & Poor's 500 fell by 17.38 points (0.48%) – to 3609.53 points.

The Nasdaq Composite lost 24.79 points (0.21%) and counted to 11899.34 points.

The dollar index continues to fall as a result of new lockdowns in the US and weak macro statistics. Currently, the dollar index is being traded at 92.25.

The 10-year US government bonds yield fell to 0.84% amid weak macro data.

It is worth paying attention to the news feed for today. At this time, we recommend limiting your risks in positions.

The news feed for 2020.11.18:
  • - UK consumer price index at 9:00 (GMT+2);
  • - Eurozone consumer price index at 12:00 (GMT+2);
  • - Building permits in the US at 15:30 (GMT+2);
  • - Core consumer price index in Canada at 15:30 (GMT+2);
  • - Speech by ECB President Lagarde at 17:00 (GMT+2)
  • - Crude oil inventories at 17:30 (GMT+2)

by Justforex, 2020.11.18

We advise you to get acquainted with the daily forecasts for the major currency pairs.

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.

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