Dollar Rises as “Horrible” Economic Data Lead Investors to Seek Safe Haven

Dollar Rises as “Horrible” Economic Data Lead Investors to Seek Safe Haven

The dollar rose on Friday morning in Asia, ending the week with its best performance since April.

The U.S. Dollar Indexthat tracks the greenback against a basket of other currencies gained 0.10% to 100.638 by 11:24 AM ET (4:24 AM GMT). The release of “horrible” economic data overnight caused investors to turn to the greenback, viewed as a safe haven.

The U.S. reported 4.427 million initial jobless claims for the past week overnight, with an unprecedented 26 million people losing their jobs since late March.

Meanwhile, the Financial Times said on Thursday that Gilead Sciences' (NASDAQ:GILD) antiviral drug remdesivir failed its first randomized clinical trials.

The company was testing the drug’s efficacy in treating the COVID-19 virus and have denied that the tests were a flop.

us dollar index

But news of the failure was enough to spook investors, who were closely watching the trial’s progress.

“I’m running with a more bearish story for the next two or three weeks,” Westpac FX analyst Imre Speizer told CNBC.

“The economic data is going to be horrible. I’m betting that markets will be shocked by it, even though we know it’s coming, and that will cause risk sentiment to fall.”

The USD/JPY pair was up 0.07% to 107.66 as the Bank of Japan said earlier in the day that it could replace its government bond-purchase target to allow unlimited buying.

The AUD/USD pair lost 0.13% to 0.6359 and the NZD/USD pair lost 0.22% to 0.5993 as stocks' losses decreased investors’ appetite for the Antipodean risk currencies.

The USD/CNY pair gained 0.25% to 7.0831. The GBP/USD pair reversed earlier losses to gain 0.07% to 1.2351, even as Bank of England official Jan Vlieghe stated overnight, “It seems that we are experiencing an economic contraction that is faster and deeper than anything we have seen in the past century, or possibly several centuries.”

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