Australia markets closed

U.S. Dollar Falls; Yen Gains Despite Rising Stock Markets

By Alex Ho - U.S. dollar was down on Friday in Asia, while the yen gained but liquidity was reduced amid a Japanese public holiday.

The U.S. dollar index that tracks the greenback against a basket of other currencies dropped 0.7% to 102.865 by 1:47 AM ET (05:47 GMT). 

Overnight, the Federal Reserve said it would expand the currency swap lines  to nine more countries, including central banks in Singapore, South Korea, Brazil, Sweden, Australia, New Zealand, Mexico, Norway and Denmark.

The GBP/USD pair gained 0.5% to 1.0744. The Bank of England (BOE) on Thursday slashed rates and expanded its bond-buying program.

The BOE said it would increase its purchases of government and investment grade corporate bonds by 200 billion pounds ($230 billion) to 645 billion pounds.

"The majority of additional asset purchases will comprise UK government bonds," the bank said in a statement. "The purchases announced today will be completed as soon as is operationally possible, consistent with improved market functioning."

The central bank’s move would "create the space for the chancellor to announce further measures to help cushion the blow," ING said.

While the central bank's action is unlikely to stop a recession, the "hope is that many of these measures can help limit the increase in unemployment, and foster a swifter and smoother recovery when the virus shutdowns have passed," ING added.

The USD/CNY pair lost 0.3% to 7.0805. China fixed its 1-year Loan Prime Rate (LPR) on Friday morning at 4.05%, the same as a month earlier. China also set the 5-year LPR at 4.75%, also unchanged from a month earlier.  

The AUD/USD pair jumped 1.9% to 0.5850. The Federal Reserve Bank of Australia cut interest rates to 0.25% on Thursday. 


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