New York Forex Market: Safe-haven sentiment drives multiple currencies higher, and the US Dollar Index stabilizes after stopping its decline

In the New York foreign exchange market, influenced by a sharp decline in U.S. stocks, market risk aversion has significantly increased, with the yen and Swiss franc emerging as the biggest winners. Meanwhile, the Bloomberg U.S. Dollar Index stabilized after four consecutive declines. This shift reflects a clear trend among global investors moving from risk assets to safe-haven assets.

Safe-Haven Currencies Drive Market Trends, Dollar Index Stabilizes

The sharp correction in U.S. stocks has led to a decline in risk appetite among investors, prompting large capital flows into traditional safe-haven currencies. The yen, as the world’s preferred safe-haven currency, rose for the fourth consecutive trading day, marking the longest streak since December last year, with strong gains. The Swiss franc, another safe-haven currency, also performed well, attracting active market interest. In the New York forex market, USD/JPY fell over 0.3% to 152.75, and USD/CHF declined 0.32% to 0.7691. Meanwhile, the Bloomberg U.S. Dollar Index halted its previous decline but showed limited gains, as markets remain cautious ahead of the U.S. CPI data due on Friday.

G-10 Currencies Diverge Further, GBP and AUD Under Pressure

Within the New York forex market, currency movements showed clear divergence. GBP/USD declined for the third consecutive day, falling less than 0.1% to 1.3621, reflecting concerns over the UK’s Q4 economic growth falling short of expectations. The Australian dollar, a typical commodity currency, was under the heaviest pressure as risk aversion increased, dropping 0.55% to 0.7088, the largest decline among G-10 currencies. In contrast, USD/CAD rose for the second straight day to 1.3613, indicating the Canadian dollar’s relative resilience among commodity currencies.

Bond Yields Fall, Economic Data Show Mixed Signals

U.S. Treasury markets saw safe-haven buying, with the 10-year Treasury yield falling below 7 basis points, while 30-year Treasury issuance was highly sought after, maintaining strong demand. On the labor front, U.S. initial jobless claims last week slightly decreased, reversing the surge caused by harsh winter weather, though overall economic data remains mixed.