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Felicia Tan
June 12 22:08

Asian Session Overview: Risk Currencies Decline in Price

The Australian dollar and other risk-sensitive currencies lost value on Friday, while shelter currencies rose. This was due to growing doubts about the rapid recovery of the world economy after the coronavirus pandemic. 
Rapidly rising rates of new diseases around the world and a sobering economic outlook from the Federal Reserve this week caused a sell-off in the stock market and risk aversion.

So far, most countries have failed to contain the coronavirus and the number of cases is growing worldwide, despite the fact that EM countries are having trouble with keeping virus under control. In the United States, new infections have increased after 5 weeks of decline. Part of the rise happened due to a large number of tests, but recent mass protests are seen to have increased risks.
After its two-day meeting on Wednesday, the Fed announced that it plans to provide extraordinary support to the U.S. economy for several years, which officials predict will be reduced by 6.5% in 2020, and the unemployment rate will be 9.3%.
AUD lost 0.5% after falling 2% on Thursday, the biggest daily decline since the March shocks in the market. The Euro also fell, continuing its decline from a three-month high on Wednesday. The British pound fell in a similar fashion. Norwegian krone lost 3.8% on Thursday. Mexican peso fell by 0.4% after falling by 3.8% in the previous session. Some currencies of emerging markets, which rose sharply lately, were also heavily affected today.
At the same time, the so-called "safe currencies" are in demand. In particular, the Swiss franc was firmly held at 0.9440 per dollar, reaching a three-month high on Thursday. The yen traded at 107.10. On Thursday, it reached a monthly high, rising by 3.1%.