The last American sessions of the currency market opened this week with varying losses for four of the major currencies traded in the market, and the list of losing currencies included commodity currencies that are most exposed to risks, as well as safe-haven currencies at the same time.
Despite the losses of both sides, the losses of commodity currencies were more severe, as the New Zealand dollar led the losses of the four currencies, followed by the Australian counterpart in second place.
On the other hand, despite its losses, the safe-haven currencies’ decline was less severe, as the Swiss franc came in third place in terms of volume of losses, followed by the yen, which incurred the least losses among the four currencies.
The decline rates of the four currencies ranged between 0.85% and 2.30%, and the following are the reasons that promoted the selling of both categories of major currencies at the same time:
The New Zealand dollar leads the currency market losses
The New Zealand kiwi opened the US currency market session with sharp losses, which pushed it to decline by about 2.30% against the other major currencies, as its biggest loss was against the US dollar, which rose strongly during today’s trading to sweep the currency market’s profits.
The reason behind the decline of the New Zealand dollar by that percentage was the sharp decline in the appetite for risk among investors in global markets today, as a result of fears of a global recession with increasing expectations that the US Federal Reserve may extend the period of monetary tightening and raise the interest rate higher than expected, after the release of positive US inflation data, As well as a number of other important data in the United States.
Those expectations led to an increase in the demand for the US dollar at the expense of its counterparts from other major currencies, especially commodity currencies that are more exposed to risks, and with investors heading towards risk aversion today, those currencies witnessed widespread selling operations, with the New Zealand dollar being hit harder. , coinciding with the country’s exposure to the devastating hurricane Gabriel.
The Australian dollar is the second losing currency
The Australian dollar – which is also one of the commodity currencies – witnessed the second largest amount of losses at the beginning of the US currency market session, as it was affected by the significant decline in risk appetite in the currency market, and it fell by about 1.77% against the other major currencies.
This also increased the very negative labor market data that was issued in Australia yesterday, to deepen the currency losses and increase the selling operations that it was exposed to, as the negative labor market data puts an end to the ability of the Reserve Bank of Australia to raise interest rates without causing greater damage and increasing unemployment in the country.
The Swiss franc is the third currency to incur losses
Despite being one of the safe havens that investors resort to in times of risk aversion, the Swiss franc was unable to avoid the losses that affected it as a result of the strong rise of the US dollar, and opened the American session of the currency market today with losses of 1.77% against other currencies, other than the commodity.
These losses were driven by the increasing appetite of investors for US Treasury yields as a safe haven in light of the increasing degree of uncertainty in the market, at a time when major economies are witnessing either a resurgence of inflation or a slowdown in its decline.
The Japanese yen is the least losing currency
The Japanese yen witnessed the least amount of losses among the four currencies, but it incurred significant losses against the US dollar nonetheless, and the Japanese currency opened today’s currency market session with losses of about 0.85%.
The limited losses of the yen were driven by investors’ anticipation of the Bank of Japan’s interest decisions after Kazuo Ueda assumed the position of governor of the bank next April, as well as the continuation of the bank’s accommodative policy to support the economy, which could avoid a potential recession, unlike other economies.