BUZZ-COMMENT-Euro may be marching towards becoming a safe haven


August 8 (Reuters) - Ever since the European Union agreed a stimulus plan to revive its coronavirus-hit economies on July 21, the euro has been in demand, pushing it closer to becoming a safe-haven currency .

The euro's share of central-bank currency reserves reported to the International Monetary Fund was steady at 20% in the first quarter of 2020, from 20.5% in the previous three months . Second-quarter data will be eagerly awaited to establish whether the single currency's share increased.

A plot of the daily returns since the start of 2020 shows the euro versus the dollar has been much more stable than major rivals, including the safe-haven Japanese yen. USD/JPY and GBP/USD have both been much more volatile than EUR/USD. EUR/USD's utility as a shelter from the fallout due to the coronavirus pandemic has grown.

EUR/USD in July saw the biggest one-month gain in a decade to close above the 1.1596 Fibonacci level, a 50% retracement of the (2018 to 2020) 1.2556 to 1.1636 fall.

For more click on FXBUZ

2020 FX Daily Returns Chart:

Monthly Fibo Chart:

(Martin Miller is a Reuters market analyst. The views expressed are his own)


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


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