U.S. Dollar plummeted down while Chinese Yuan rallied

The U.S. dollar declined on Wednesday, hovering near a five-month low against the Japanese yen. The currency tumbled down after the U.S. Federal Reserve’s emergency 50 basis point rate cut caused more concerns about the impact of the coronavirus.

The greenback traded near its lowest point in nearly two years against the Swiss franc as well. Investors deemed rate cuts insufficient to neutralize the risks posed by the global spread of the virus. They turned to safe-haven currencies.

The chief currency strategist at Mizuho Securities, Masafumi Yamamoto, said that so far, the Fed and the G7 were not enough to support markets. However, traders are betting that the Fed will cut rates more than the European Central Bank.

Meanwhile, the dollar fell to 106.85 yen in Asia on Wednesday, reaching its lowest level in almost five months, until steading at 107.36 yen.

The Australian dollar also lowered, with its last trading at $0.6599. Its decline was due to the weak Chinese data as the country’s economy depends highly on trade with China.

According to the new report, China’s services sector plummeted down to its weakest point in February. Such data is the result of coronavirus’ impact on the country’s economy.

Despite that, the Chinese yuan hit a six-week high of 6.9288 per dollar in the onshore market. It seems China is recovering slowly while the dollar hit rock bottom after the virus spread in the U.S.