Let’s check the market. Against most other currencies, the United States dollar climbed as a shortage of the money pushed up swap rates.
This week, to increase dollar liquidity, major central banks have taken steps. Nevertheless, it has done very little to slow the dollar’s gains.
The greenback rose 0.65% to 108.76 against the yen.
In most cases, investors unloaded Treasuries. They have also dumped other government bonds as well as gold. It is for keeping their money in dollars. Typically, investors are buying precious metals and government debt during times of uncertainty. Thus, it confounded many analysts.
After the European Central Bank announced a new asset purchase program, the euro initially rose. Nevertheless, the common currency erased gains to trade little changed at $1.0924.
Approaching a record high reached Wednesday, the dollar rose 0.5% to 11.3860 Norwegian crowns. Versus the euro, the Norwegian crown also slid to a record low.
Late on Wednesday, an emergency meeting of the European Central Bank announced a purchase scheme. It came less than a week after policymakers launched new stimulus measures.
Dollar and Others
Major central banks announced this week’s emergency cuts of interest rate, asset purchases, and dollar liquidity provisions to attempt to calm down financial markets. Nevertheless, the effect has been less than many policymakers wanted.
There is a dollar funding crisis and consequent rise in the dollar in spot markets. Thus, it caused deep falling in emerging market currencies. This year, the dollar is up 27% so far against Brazil’s real. It is also up against the Indonesian rupiah, and the Korean won around 10% each.
In recent weeks, global markets have been upended. It is because of the spread of coronavirus from central China. Thus, governments responded with increasingly strict restrictions on daily life and travel. It disrupted business and prompted consumers to stay at home and rein in spending.
It is the leading news for today.
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