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Global stock markets stayed steady past month despite coronavirus pandemic. Mammoth policy easing to counter the economic fallout from the COVID-19-led lockdowns caused the rally. Wall Street has especially displayed a sturdier performance.
However, the beginning of the pandemic was not the same with stocks slumping into a bear market in mid-March. Meanwhile, oil market underwent an extremely rough patch with WTI prices diving into negative territory in mid-April. Subdued demand and storage crisis led to this catastrophe.
All these ups and downs are surely making a huge impact on the currency world. Let’s analyze the currency ETFs that won and those that lost in the past month.
Winners
Invesco CurrencyShares Australian Dollar Trust (FXA - Free Report) – Up 1.4%
The Australia dollar acts as a very good proxy of risk sentiments. Since global markets rallied past month on trillion-dollar stimuli, Australian dollar perked up and emerged as the best performer. Gradual opening of economies across the globe, and an appeasing phone call between American and Chinese trade negotiators also provided a boost to risk appetite, and erased fears of a new round of U.S. tariffs.
Invesco DB US Dollar Index Bullish Fund (UUP - Free Report) – Up 0.8%
Despite a super-dovish Fed, the greenback has been steady in recent trading. The reason for the rally is the U.S. economy’s improved position among developed markets and the greenback being viewed as a safe-haven asset. Also, investors were selling their possessions to retain money in U.S. dollars due to the unparalleled uncertainty caused by the virus pandemic. Also, easing lockdowns boosted demand for U.S. dollar lately.
Invesco CurrencyShares Japanese YenTrust (FXY - Free Report) – Down 0.02%
Yen is viewed as a safe-haven asset. Though the currency could not remain in the positive territory past month, still-edgy market sentiments and fears of a second wave of virus contagion made the currency a winner among the lot.
Coronavirus crippled the British economy badly which is why pound skidded. Bank of England anticipates the worst U.K. recession since 1706. GDP is likely to slip 14% in 2020 with Q2 likely to see 25% slump. Since the beginning of the pandemic, the BOE has slashed rates twice from 0.75% to 0.1% and announced £200 billion ($247.55 billion) of new quantitative easing, bringing its bond buying program to a total of £645 billion.
Invesco CurrencyShares Canadian Dollar Trust (FXC - Free Report) ) – Down 1.10%
Canada is an oil-rich nation. With oil prices diving to a two-decade low, Canada’s currency had every reason to slump. As far as GDP is concerned, Canada’s GDP stalled in February while the economy could have shrunk a record 9% in March, per estimates, as quoted on Reuters.
Invesco CurrencyShares Euro Currency Trust (FXE - Free Report) – Down 1.00%
The Euro area GDP shrunk by a record 3.8% in the first quarter. One of the worst COVID-19-hit nations, Italy, could see its debt soar to 158.9% of GDP this year. Euro zone GDP could slip 7.7% this year, per European Commission. This explains the decline in the common currency.
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Currency ETF Winners & Losers of Past Month
Global stock markets stayed steady past month despite coronavirus pandemic. Mammoth policy easing to counter the economic fallout from the COVID-19-led lockdowns caused the rally. Wall Street has especially displayed a sturdier performance.
However, the beginning of the pandemic was not the same with stocks slumping into a bear market in mid-March. Meanwhile, oil market underwent an extremely rough patch with WTI prices diving into negative territory in mid-April. Subdued demand and storage crisis led to this catastrophe.
All these ups and downs are surely making a huge impact on the currency world. Let’s analyze the currency ETFs that won and those that lost in the past month.
Winners
Invesco CurrencyShares Australian Dollar Trust (FXA - Free Report) – Up 1.4%
The Australia dollar acts as a very good proxy of risk sentiments. Since global markets rallied past month on trillion-dollar stimuli, Australian dollar perked up and emerged as the best performer. Gradual opening of economies across the globe, and an appeasing phone call between American and Chinese trade negotiators also provided a boost to risk appetite, and erased fears of a new round of U.S. tariffs.
Invesco DB US Dollar Index Bullish Fund (UUP - Free Report) – Up 0.8%
Despite a super-dovish Fed, the greenback has been steady in recent trading. The reason for the rally is the U.S. economy’s improved position among developed markets and the greenback being viewed as a safe-haven asset. Also, investors were selling their possessions to retain money in U.S. dollars due to the unparalleled uncertainty caused by the virus pandemic. Also, easing lockdowns boosted demand for U.S. dollar lately.
Invesco CurrencyShares Japanese YenTrust (FXY - Free Report) – Down 0.02%
Yen is viewed as a safe-haven asset. Though the currency could not remain in the positive territory past month, still-edgy market sentiments and fears of a second wave of virus contagion made the currency a winner among the lot.
Losers
Invesco CurrencyShares British Pound Sterling Trust (FXB - Free Report) ) – Down1.4%
Coronavirus crippled the British economy badly which is why pound skidded. Bank of England anticipates the worst U.K. recession since 1706. GDP is likely to slip 14% in 2020 with Q2 likely to see 25% slump. Since the beginning of the pandemic, the BOE has slashed rates twice from 0.75% to 0.1% and announced £200 billion ($247.55 billion) of new quantitative easing, bringing its bond buying program to a total of £645 billion.
Invesco CurrencyShares Canadian Dollar Trust (FXC - Free Report) ) – Down 1.10%
Canada is an oil-rich nation. With oil prices diving to a two-decade low, Canada’s currency had every reason to slump. As far as GDP is concerned, Canada’s GDP stalled in February while the economy could have shrunk a record 9% in March, per estimates, as quoted on Reuters.
Invesco CurrencyShares Euro Currency Trust (FXE - Free Report) – Down 1.00%
The Euro area GDP shrunk by a record 3.8% in the first quarter. One of the worst COVID-19-hit nations, Italy, could see its debt soar to 158.9% of GDP this year. Euro zone GDP could slip 7.7% this year, per European Commission. This explains the decline in the common currency.
Want key ETF info delivered straight to your inbox?
Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week. Get it free >>