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Risk Off: USDX Leaps 0.64% Amid Coronavirus Concern

There are fears that the coronavirus pandemic may be about to cause further economic problems Stocks and shares decline in value across the…
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  • There are fears that the coronavirus pandemic may be about to cause further economic problems
  • Stocks and shares decline in value across the world as the UK appears to prepare for lockdown
  • The dollar index rose and reached 93.555 – despite questions over the Fed’s inflation policy
  • Risk-on antipodean currencies suffer in the market and decline in value

The US dollar index saw dizzying heights of success on the price charts on Monday as the value of many major global stocks fell.

Stocks across the world dropped as traders began to make assumptions about a ‘second wave’ of the pandemic, which has already claimed almost a million lives and caused significant economic slowdowns.

In Europe, stock prices were seen at their worst position for a fortnight.  Similar problems were seen for American stock futures.  The index, which is used by traders to assess the performance of the greenback compared to many other currencies from around the world, was spotted up by more than 0.6%.  This left it at 93.555.

The rise for the currency came despite the fact that many market watchers have spent the last few weeks predicting that the currency was in for an extended gloomy period.  This prediction had been made by some following the announcement from the US Federal Reserve that strict inflation targets would be adhered to.  However, the resurgence of question marks over the domestic and global responses to the pandemic appeared to be enough to put that fear to bed.

The dollar also went up in a number of other pairs.  The British pound was one of the worst victims, with the currency going down by 0.9%.  The dollar was spotted at $1.28 in the markets in this pair at one stage.  The response to the pandemic in Britain, in particular, was one of the main drivers towards the risk-off mood.  Senior British government scientists warned on Monday that the country would be facing 50,000 cases of the virus every day by the time October arrives.  There are now fears of a further lockdown or some variety of restrictions on movement.  However, some of the worst victims of the dollar’s resurgence were the antipodean currencies.

The Australian dollar, which has long since been known for being a proxy for risk, was down by over a percentage point.  It was seen at $0.7204 against its US counterpart, which marked a significant fall.  The New Zealand dollar, though, went further, with a decline of 1.5% reported at one stage.  It was spotted at just over $0.66 on the price charts.  For some analysts, the day appeared to herald similar feelings to the announcement of the original significant coronavirus restrictions back in March.  Whether or not the economic and forex aspects of this wave of the pandemic will be as significant, though, remains to be seen.

The post Risk Off: USDX Leaps 0.64% Amid Coronavirus Concern appeared first on Forextraders.com.

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