U.S. dollar, yen outperform amid poor global economic data

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NEW YORK — The safe-haven yen and dollar rose on Wednesday, as investors sought

refuge in these currencies in the wake of dire global economic numbers.

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The yen rose to a seven-week high against the dollar and a 3-1/2-peak versus the euro. The dollar rose

to its highest in more than a week against a basket of major currencies.

Manufacturing data in the euro zone and the UK painted a bleak picture, undermining the single

European currency and sterling.

U.S. private payrolls data also showed a record of more than 20 million jobs lost in April as shown

the ADP National Employment Report, but the dollar held gains.

“We had some weak data out of Europe and the UK manufacturing data was also pretty poor, similar to

the U.S. numbers,” said Shaun Osborne, chief FX strategist, at Scotiabank in Toronto.

“It’s no surprise that these numbers are terribly weak. The ADP number was terrible and we kind of

went ‘yawn’. But it’s a staggering number. I think we’re being conditioned to logically expect these types

of numbers.”

In Europe, euro zone business activity almost ground to a halt last month as government-imposed

lockdowns to stop the spread of the coronavirus forced factories, shops and restaurants to close and

recreation to cease, a survey showed.

Retail sales in the euro zone also suffered their largest decline on record in March.

In the UK, British construction suffered its sharpest decline on record, more than twice as large as

the previous month, even though general construction work was not ordered by the government to stop as

part of the lockdown intended to limit the spread of the coronavirus.

In late morning trading, the dollar index rose 0.3% to 100.100, climbing earlier to a more than

one-week high of 100.200.

Against the yen, the dollar fell 0.4% to 106.11 yen, after dropping to a seven-week low of

106.06 yen.

The euro was down 0.3% against the dollar at 1.0802, hitting a nearly two-week low. It

resumed its decline after a court decision challenged German participation in the euro zone’s stimulus

program.

Germany’s highest court on Tuesday gave the European Central Bank three months to justify purchases

under its bond-buying program, or lose the Bundesbank’s participation in one of its main stimulus

schemes.

The ECB is expected to be able to justify its bond purchases, so the German court decision is unlikely

to derail the euro zone’s stimulus efforts. But the uncertainty is only the latest strain on Europe’s

coronavirus response and undermines the euro zone project and the euro.

The fact that speculators are now long the euro also undermines its current levels, analysts said.

Leveraged funds have trimmed their long positions on the euro, but the number of longs is still close to

their two-year highs.

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Currency bid prices at 10:39AM (1439 GMT)

Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid

Previous Change

Session

Euro/Dollar EUR= $1.0794 $1.0838 -0.41% -3.69% +1.0847 +1.0783

Dollar/Yen JPY= 106.1400 106.5800 -0.41% -2.49% +106.6200 +106.0600

Euro/Yen EURJPY= 114.60 115.46 -0.74% -6.03% +115.5800 +114.5800

Dollar/Swiss CHF= 0.9749 0.9725 +0.25% +0.76% +0.9758 +0.9722

Sterling/Dollar GBP= 1.2348 1.2434 -0.69% -6.87% +1.2449 +1.2350

Dollar/Canadian CAD= 1.4127 1.4045 +0.58% +8.79% +1.4136 +1.4023

Australian/Doll AUD= 0.6428 0.6430 -0.03% -8.47% +0.6452 +0.6417

ar

Euro/Swiss EURCHF= 1.0526 1.0542 -0.15% -3.00% +1.0547 +1.0522

Euro/Sterling EURGBP= 0.8741 0.8714 +0.31% +3.39% +0.8747 +0.8699

NZ NZD= 0.6032 0.6050 -0.30% -10.45% +0.6072 +0.6033

Dollar/Dollar

Dollar/Norway NOK= 10.2918 10.2619 +0.29% +17.24% +10.3165 +10.2385

Euro/Norway EURNOK= 11.1129 11.1249 -0.11% +12.96% +11.1489 +11.0795

Dollar/Sweden SEK= 9.8559 9.8374 -0.16% +5.43% +9.8750 +9.8066

Euro/Sweden EURSEK= 10.6417 10.6586 -0.16% +1.65% +10.6647 +10.6200

(Reporting by Gertrude Chavez-Dreyfuss; Additional reporting by Olga Cotaga in London; Editing by David

Gregorio)