Reports of low corporate earnings and a looming recession in the US economy fueled the demand for US dollars in the markets. The currency traders look to the US dollar as a ‘safe haven’ during tough times. The demand for the currency has strengthened the dollar on Tuesday night.
The demand was triggered by news reports of central banks across the world increasing interest rates in order to control inflation. Traders are expecting a tough and combative financial year ahead.
The negative sentiment was strengthened by conflicting reports about the Chinese economy. Although the Yuan gained 0.1%, it has been experiencing unprecedented losses all through the week. Traders remain unsure about the manufacturing sector in China and about its economic recovery overall. The yuan closed at level 7 against the dollar.
Thai baht made surprising 0.4% gains this week as the country reported a trade surplus in March. Singapore’s above-average recovery in the manufacturing sector was acknowledged by traders. The Singapore dollar rose by 0.1% in value.
The markets eagerly await reports from the Bank of Japan’s Friday meeting. They are hoping for some positive news. However, traders speculate a tumultuous market over the next few months.
