The safe-haven Japanese yen and Swiss franc hit multi-month highs against the dollar on Friday as an unexpected drop in US manufacturing fanned worries of a slowdown, sending equities and bond rates plummeting.
Sterling remained at a one-month low after falling over 1% overnight as the Bank of England began its interest-rate-cutting cycle in a carefully calibrated decision. The euro also fell at a one-month low on dovish comments from the European Central Bank.
The yen traded roughly 0.2% higher at 149.085 per dollar, after reaching 148.51 overnight for the first time since mid-March. The franc rose to its highest level since early February, at 0.8726 per dollar.
They were the only two major currencies to outperform the dollar overnight, which, strangely, attracts safe-haven flows even when the United States is the source of concern.
The risk-sensitive Australian dollar fell 0.14% to $0.6493 on Friday, adding to the previous session’s 0.52% fall.
That comes after megacaps led a Wall Street selloff on Thursday that resonated throughout Asia, with Japan’s Nikkei dropping more than 4% and South Korea’s Kospi down 2.5%.
U.S. 10-year Treasury rates fell as much as 14 basis points to 3.965% overnight, breaking through the psychological 4% barrier for the first time in six months.
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