On Thursday, the dollar remained stable against a basket of other major currencies. The exchange rate of the “safe haven”, the yen, began to decline against the background of the fact that relative calm returned to the markets after large-scale sales caused by concerns about the situation in the global economy. At 8:40 London time, the US dollar index which shows the purchasing power of the dollar against a trade-weighted basket of six major currencies, changed slightly at 97.81 after rising 0.2% on Wednesday.
The dollar rose against the yen by 0.1% to 106.19. On Wednesday, the yen rose 0.8% against the US dollar, which was the highest growth rate in two weeks. Frightened investors dumped stocks of companies and preferred protective assets after Wednesday, for the first time in 12 years, the yield curve of US long-term and short-term bonds swapped.
The yield curve for two-year US government bonds was higher than the yield curve for the 10-year US-bound. Some analysts see this as a harbinger of the US economy entering a recession phase. Investor sentiment was fragile even after the disappointing economic reports of China and Germany revealed the extent of the damage to the trade war between the United States and China to the leading exporting countries. On Wednesday, US President Donald Trump linked the conclusion of a trade agreement with China with the peaceful conclusion of protests in Hong Kong. Investor sentiment has improved slightly amid hoped that central banks, in particular, the Fed, will move to ease monetary policy.
On Thursday, the US bond yield curve remained inverted for the second trading session in a row. This means that traders maintain pessimistic sentiment regarding forecasts for economic growth. Swiss franc depreciates against the greenback to 0.9746. Euro rose slightly against the dollar to 1.1147.