Foreign exchange: Euro continues to show weakness – Yen increases significantly 11.03.20

NEW YORK (dpa-AFX) – The euro continued to be weak on Wednesday in late US currency trading. Most recently, the common currency was quoted at $ 1.1275. In the early European currency business, it had cost almost a cent more. The euro rose to a one-year high on Monday. The European Central Bank (ECB) had set the reference rate at $ 1.1336 (Tuesday: 1.1390). The dollar had thus cost 0.8822 (0.8780) euros.

In the middle of the week, currencies perceived as safe were in particular demand. This includes primarily the Japanese yen, which rose about one percent against the US dollar. This was triggered by the US stock exchanges, which came under severe pressure again due to the corona crisis.

Currencies from countries with high raw material production such as Russia and South Africa were also under pressure. Market participants gave the falling oil prices as the reason. On Monday, crude oil prices had plummeted as they had in thirty years, which had contributed to panic in the financial markets.

Meanwhile, the British pound weakened, the Bank of England cut its key interest rate in an unscheduled step. The 0.5 percentage point move to mitigate the effects of the virus crisis is equivalent to a reduction in the Fed’s rate of about a week ago. British Chancellor of the Exchequer Rishi Sunak announced state relief for companies particularly affected by the crisis.

The ECB is also expected to respond after the Fed and the Bank of England responded to the corona crisis. The Monetary Policy Council will announce its decisions after its Thursday meeting. Analysts can get an additional one Rate cutto introduce new low-cost loans for banks or to expand bond purchases. It is also conceivable that the capital requirements for banks will be reduced in order to increase their scope for lending. / Bek / fba

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