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U.S. Dollar Higher Amid Coronavirus Fears

U.S. Dollar Higher Amid Coronavirus Fears

The U.S. dollar firmed against its major counterparts in the European session on Friday, as investors sought safe-haven assets following grim Eurozone business survey, as well as continued COVID-19 concerns after virus cases exceeded one million.

The IHS Markit eurozone services purchasing managers index slumped to a reading of 26.4 in March from 52.6 in February, the worst-ever reading in the history of the series, as the covid-19 pandemic and associated measures taken to contain the outbreak through Europe weighed heavily on business performance.

The number of confirmed coronavirus cases crossed the 1 million mark globally with a death toll of 53,030, according to the new tally from Johns Hopkins University.

Around 1,015,403 people have been diagnosed with the novel coronavirus across the world.

Investors didn’t react to the disappointing U.S. jobs data for March.

Data from the Labor Department showed that the U.S. employment fell much more than expected in the month of March.

The report said employment plunged by 701,000 jobs in March after jumping by an upwardly revised 275,000 jobs in February.

Economists had expected employment to slump by 100,000 jobs compared to the addition of 273,000 jobs originally reported for the previous month.

With the much bigger than expected drop in employment, the unemployment rate surged up to 4.4 percent in March from 3.5 percent in February. The unemployment rate had been expected to climb to 3.8 percent.

The currency rose in the Asian session as the rapid rise in the coronavirus cases world-wide dampened risk sentiment.

The greenback advanced to a 3-day high of 1.2243 against the pound from yesterday’s closing value of 1.2392. The greenback is seen finding resistance around the 1.21 mark.

Survey data from IHS Markit and Chartered Institute of Procurement & Supply showed that the UK service sector registered its steepest downturn in more than two decades in March due to business shutdowns and order cancellation in response to the coronavirus, or covid-19, pandemic.

The services Purchasing Managers’ Index fell to 34.5 in March from 53.2 in February. This was also below the flash reading of 35.7

The greenback approached 1.0775 against the euro, its strongest since March 25. The pair had closed Thursday’s deals at 1.0855. Next key resistance for the greenback is likely seen around the 1.05 level.

Final data from IHS Markit showed that the euro area private sector logged its biggest monthly fall on record in March as the coronavirus disease, or covid-19, pandemic impacted heavily on economic activity.

The final composite output index fell sharply to 29.7 in March from 51.6 in February. This was also weaker than the flash estimate of 31.4.

The greenback was up against the yen at a 3-day high of 108.68. The pair was worth 107.86 when it ended deals on Thursday. The greenback is likely to face resistance around the 110.00 region, if it gains again.

The latest survey from Jibun Bank showed that Japanese services sector continued to contract in March, and at a much steeper rate, with a services PMI score of 33.8.

That’s down sharply from 46.8 in February, and it moves further beneath the boom-or-bust line of 50 that separates expansion from contraction.

The greenback climbed the most since March 25 against the franc, at 0.9796. At Thursday’s close, the pair was valued at 0.9734. Should the greenback strengthens further, it is likely to test resistance around the 1.00 region.

The greenback moved up to 8-day highs of 0.5843 against the kiwi and 0.5980 against the aussie, from Thursday’s closing values of 0.5913 and 0.6058, respectively. The greenback is poised to challenge resistance around 0.58 against the kiwi and 0.55 against the aussie.

In contrast, the greenback pared gains to 1.4123 against the loonie, from a high of 1.4224 hit at 6:15 am ET. The greenback was trading at 1.4136 per loonie at yesterday’s close. The greenback may seek support around the 1.33 region.

The material has been provided by InstaForex Company – www.instaforex.com