The Federal Reserve race cut blows. After it dollar rebounds. The mild weather of February boosts the United States’ private payrolls. As Bank of China matches the United States rate cut on coronavirus threat, the Canadian dollar falls.
There was an emergency interest rate cut in the previous session. The decrease was made by the United States Federal Reserve to shove the United States currency down to an eight-week low. Thus, on Wednesday, against a basket of money, the dollar climbed.
Everyone tries to fend off the economic damage from the spreading coronavirus, analysts say. Thus, Investors were likely waiting to see which other major central banks would follow the trend of the Federal Reserve and make cuts of emergency to their interest rates.
On Tuesday, the United States central bank surprised investors. The central bank slashed rates by 50 basis points to a target range of 1.00% to 1.25%. It was to combat the effects of the coronavirus, two weeks before a regularly scheduled policy meeting.
Dollar and Others
The dollar index measures the strength of the greenback against a basket of six other major currencies. It was 0.24% higher at 97.365. On Tuesday, the index slipped as low as 96.926. It is the weakest indicator since January 8.
Jonathan Coughrtey is managing director at Action Economics. He said in a note that dollar had found its feet after a phase of underperformance against the major currencies and euro.
Upbeat data is supporting the greenback.
In February, the United States private payrolls increased more than expected. It pointed to labor market strength before a recent escalation of recession fears caused by the epidemic of the coronavirus.
Moreover, in February, the United States service sector activity accelerated to a one-year high. Thus, it suggested underlying strength in the economy despite the outbreak of coronavirus.
It is the leading news of the international exchange market today.