The US dollar on Friday firmed against major currencies for a third straight day as investors took shelter in the US currency amid worsening economic fallout from the COVID-19 pandemic.
“As we see poor data coming in from Europe, UK, Italy, if you’re trying to be rushing anywhere, it would be US Treasuries and the US dollar as a safe haven,” said John Doyle, vice president of dealing and trading at Tempus Inc in Washington.
The US dollar largely shrugged off the US non-farm payrolls report that showed massive job losses of 701,000 last month, compared with expectations of 100,000 lost jobs.
Last month’s contraction abruptly ended a historic 113 straight months of employment growth in the US.
The unemployment rate rose to 4.4 percent from 3.5 percent the previous month.
The US Department of Labor also revised February’s number upward to 275,000 job gains.
“The plunge in non-farm payrolls in March, which is already close to the worst monthly declines during the global financial crisis, suggests the coronavirus pandemic started to decimate the economy even sooner than we thought,” Capital Economics Ltd senior US economist Andrew Hunter said.
The non-farm payrolls report followed Thursday’s data showing initial claims for US unemployment benefits rose to 6.65 million in the latest week from an unrevised 3.3 million the previous week.
In Taipei, the New Taiwan dollar fell against the US dollar on Wednesday, losing NT$0.054 to close at NT$30.308, down 0.2 percent from Friday last week. Markets in Taiwan were closed on Thursday and Friday for the Tomb Sweeping Day long weekend.
The US dollar index rose 0.5 percent to 100.68 on Friday. The index posted a 2.4 percent gain on the week, having whipsawed last month from highs on a scramble for cash before slumping as the US Federal Reserve flooded the market with liquidity.
The euro fell 0.4 percent against the US dollar at US$1.0810, for a 2.9 percent weekly loss. Indecision among eurozone governments about a rescue package for the region’s hobbled economies has weakened the euro.
The Japanese yen, Swiss franc, sterling, as well as the Australian and New Zealand dollars all lost ground as the US dollar strengthened across the board.
The US dollar rose 0.5 percent to ￥108.42, up 0.6 percent for the week.
As lockdowns continue, the economic impact of the pandemic is becoming more marked, with purchasing managers’ indices across the eurozone and the UK on Friday showing a slump in business activity.
“The complication is that while all the things that the governments have done are very positive, they’re like extra welfare payments and they can’t do anything more than that,” Adrian Lee & Partners president and chief investment officer Adrian Lee said.
Additional reporting by staff writer, with CNA
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