Yen, dollar ascendant as a delta variant encourages the escape to safety

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A US one hundred dollar bill and Japanese 10,000 yen notes can be seen in this photo illustration in Tokyo, Feb. 28, 2013. REUTERS / Shohei Miyano / File Photo

TOKYO, Jul 20 (Reuters) – Safe-harbor currencies such as the Japanese yen and the US dollar held near multi-month highs against the riskier Australian dollar and the British pound on Tuesday as fears mount rampant Coronavirus variant could turn the global economic recovery on its head.

The yen rose to 80.05 per Aussie dollar on Monday for the first time since early February, before trading at 80.40 early Tuesday. It also rebounded to a nearly three-month high of 149.35 per pound overnight, most recently switching hands at 149.73.

The dollar rose to a nearly 8-month high of $ 0.73225 per Aussie at the start of the trading week and hit its highest level since early February at $ 1.3655 per pound sterling. Most recently it was at $ 0.73390 per Aussie and $ 1.36685 against the pound.

The yen overtook the dollar, rising to 109.07 per greenback on Monday for the first time since late May, helped by a steep decline in benchmark US Treasury bond yields to as high as 1.1740% for the first time since mid-February. On Tuesday, a dollar bought 109,555 yen.

The euro trailed the dollar, falling overnight to its lowest level since early April at $ 1.1764 before last trading at $ 1.17965.

The fast-spreading delta variant of COVID-19 is the dominant strain worldwide today and is accompanied by a surge in infections in the United States, especially in areas where vaccinations are delayed. Continue reading

Meanwhile, Boris Johnson’s “Freedom Day,” which ended for over a year with COVID-19 lockdown restrictions in England, has been marred by rising infections and the Prime Minister’s own forced self-isolation after Health Secretary Sajid Javid tested positive for the virus. Continue reading

In Australia, nearly half of the 25 million people live under lockdowns to suppress a Delta variant outbreak. Continue reading

“As for the markets now, it is likely … an increase in infections in developed markets with high vaccination rates,” National Australia Bank analyst Tapas Strickland wrote in a note to customers.

“That suggests virus restrictions may have to last longer,” he said.

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Currency bid prices at 0020 GMT

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Tokyo Forex Market Information from BOJ

Reporting by Kevin Buckland Editing by Shri Navratnam

Our Standards: The Thomson Reuters Trust Principles.



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