The US dollar exchange rate rises

0

Investor sentiment over concerns regarding the spread of Covid-19 coronavirus in Europe and the subsequent sharp decline in the economies of the European Union and especially the euro zone countries, has led to increased investor interest in the US dollar (USD), despite the US experiencing the viral infection also. Thus, the US dollar currency index (DXY) has already exceeded the US dollar price level of US $ 100.

On 19 March, 2020, at 8:18 am CET the US DXY has seen the USD at the 101.11 price level with a slight decrease of -0.05%. At the same time the exchange rate of the EUR/USD currency pair was US$ 1.0911 per EUR with the daily EUR decrease of -0.02% against the USD on the Forex market. The currency of the United Kingdom of Great Britain and Northern Ireland the British pound (GBP) has weakened significantly against the USD after the interest rate cut by the Bank of England (BoE). During the European morning on 19 March at 8:27 am CET, the GBP/USD currency pair traded on the Forex market at a rate of US$ 1.1568 per GBP with a daily GBP decrease of -0.39% against the USD.

At the moment, investors are de facto selling almost everything they can to keep their money in US dollars because of the unprecedented amount of uncertainty caused by the pandemic Covid-19, which is a real threat to the world economy, especially to developed world economies. “This is similar to what happened during the global financial crisis in that investors are even selling what are normally considered safe-haven assets”, said Junichi Ishikawa, senior foreign exchange strategist at IG Securities in Tokyo. According to analysts, this fully corresponds with what happened with the price of gold, when after its previous rise to US$ 1,700 per troy ounce, it has fallen significantly below the current US$ 1,500 per troy ounce. On 19 March at 8:30 am CET the price of gold was US$ 1.489.90 per troy ounce with the daily strengthening of +0.80% of its price on the commodity market.

According to economic reporters along with analysts, on Thursday 19 March the USD resumed its steady rise against the major currencies, because the wild financial market volatility and fears of tightening liquidity caused by the pandemic caused investors to turn to free cash flow state. In this context, the single European currency, the Euro (EUR) rose briefly against the USD and the GBP after the European Central Bank (ECB) announced an asset purchase program worth EUR 750 billion (US$ 816.83 billion) in response to the outbreak of the coronavirus. This effort was subsequently overwhelmed by the reversal of the US dollar business trend, where the Euro only reduced its previous loss. The major central banks announced another emergency interest rate cut, asset purchases and US dollar liquidity this week in an effort to appease the financial markets, but the effect was less effective than many financiers and especially politicians wanted.

LEAVE A REPLY

Please enter your comment!
Please enter your name here