Let’s check the changes in the market. The Federal Reserve unveiled new measures for keeping demands working correctly. Thus, on Monday, the dollar fell. The greenback fell 0.75% to 102.06.
One measure which the Federal Reserve took was an open-ended asset purchase program. The central bank will run that program in the amounts needed for supporting smooth market functioning and effective transmission of monetary policy to broader the economy and financial conditions.
After the Federal Reserve announcement, on Monday, the United States oil prices and futures reversed course and rose.
Investors hope for big fiscal spending for mitigating the damage to the global economy. Nevertheless, the uncertainty about the spread of the virus is more likely to support the dollar in the future.
Yukio Ishizuki is an FX strategist at Daiwa Securities in Tokyo. He said that they moved from risk-off to a phase where major players are competing. They are fighting because of the safety of holding dollars in cash. He added that there still are many investors who need to sell riskier assets. Moreover, they want to maintain their money in dollars.
Investors want to keep their money in dollars. It is because the epidemic caused uncertainty. Thus, they have been liquidating positions in safe-havens and other riskier investments.
Major central banks ramped up efforts. It was to ease a global dollar funding crunch. Nevertheless, the United States currency remains in demand. It is because of the high degree of uncertainty about the unknown flu-like virus.
Against many emerging market currencies, the dollar also surged. It is highlighting the growing risk aversion sense across the globe.
The dollar rose to a record high against the Mexican peso in Early Asian trading.
So far this year, against Brazil’s real, the dollar is up 26%. Against the Korean won, the greenback is up 15%. And finally, against the Indonesian rupiah, it is up 15%.
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