Dollar back on track following poor week

David Hobart

The US dollar appeared to get back on track in the global foreign exchange markets on Monday after it suffered one of the worst weeks in its history last week.

The currency, which more broadly has experienced extreme fluctuation in the strange context of the coronavirus, managed to get back on track despite dire predictions around the death toll from the pandemic.

According to Anthony Fauci, who runs the National Institute of Allergy and Infectious Diseases, coronavirus could be responsible for a six figure number of deaths as high as 200,000 in the US if a process of attempting to mitigate the virus’ effects was not successful.

The announcement came as President Donald Trump, who had previously hinted at the possibility of the current restrictions on movement being over by the Easter period in early to mid-April, decided to keep them in place until the end of April.

The dollar has had a tumultuous two weeks in many ways.

Two weeks ago, the greenback saw its best week on week rise since the year 2008.

Last week, however, it saw its worst weekly plunge since 2009.

Traders logging on to the broker platforms at ATFX and elsewhere, noticed that the currency appeared to be firmly on the up as trading got underway on Monday morning.

In the Australian dollar’s pair with the greenback, for example, the Aussie was down by around 0.7%.

It was seen at $0.6134 at one point.

The single European currency appeared to drop by half a percentage point against the greenback and was seen at $1.1082 at one stage.

The pound was down by 0.7% too, seen at $1.2371 at one point.

Overall, the US dollar index – which is a not a currency in itself but is instead a mechanism used by traders to monitor the performance of the currency against several other major ones from across the globe – was up by 0.3% to 98.641.

One currency which did not appear to suffer at the hands of the greenback, however, was the Japanese yen.

This currency, which is known for being a so-called safe haven, was up by half a percentage point in its pair against the US dollar.

According to analysts, there is a general sense of risk aversion in place across the forex markets while the exact parameters of the virus’ spread continue to be unclear.

While coronavirus is expected to carry on being the central area of focus for the forex markets in the coming days and weeks, there are other regular events scheduled into the economic calendar in the days ahead.

Today there will be a pending home sales figure out of the US for February.

This is expected to show a month on month change from 5.2% to -1%.

This is expected to be released at 2pm GMT.

Japanese unemployment figures for February will be out at 11:30pm GMT.

These are expected to show no change from 2.4% where they were last recorded.

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David Hobart
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