Dollar higher at quarter-end on massive global appetite for the greenback

The dollar is higher on global demand and as the Federal Reserve adds liquidity via a repo facility for other central banks. Positive sentiment around governments stimulus efforts to fight the fallout of the coronavirus begins to wear thin. CAD weakens with the price of oil bumping along in $20/bbl range as transportation demand is delayed. China’s renminbi strengthens on better than expected economic data. 

“A man cannot be too careful in the choice of his enemies”  

Oscar Wilde
  • FX Rates
    March 31, 2020

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  • USD

    The dollar is higher again today following yesterday’s quarter-end demand. The Federal Reserve responded to the global demand for dollars by implementing a new repurchase program. The program essentially allows central banks to temporarily borrow dollars to be lent to banks and companies within their countries. The move could lessen the demand for dollars. The repo program is to last 6 months.

    The Conference Board reading on March’s Consumer Confidence index is due later this morning.

    GBP

    The pound is flat against the dollar on quarter-end positioning. 

    PM Johnson and members of his cabinet self-isolate while his government is under increasing pressure to speed up the testing of patients and healthcare workers for Covid-19. Testing levels in EU nations are significantly higher than in the UK.

    UK GDP for 2019 Q4 came out this morning in-line with forecasts.

    EUR

    The euro weakened as an inflation indicator for March came in at 0.7% with expectations it will go lower in coming months as economic activity sinks.

    The World Health Organization released some welcome news yesterday stating that it believes there are signs that cases in Europe are stabilizing with Italy and Spain reaching a peak as lockdowns start to bear fruit.

    CAD

    The Canadian dollar weakened overnight as the oil price remained low at around $20 per barrel. Expectations for reduced economic activity, particularly travel, are being extended as governments around the world signal containment measures to fight the coronavirus result in lower demand for oil into the second half of 2020.

    ASIA/PACIFIC

    China’s National Bureau of Statistics released March’s purchasing managers index which came in much better than expected at 52. This compares to February’s reading of 35 which was the lowest ever. The renminbi and other regional currencies gained vs. the US dollar on the news.

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Peter Compton
WRITTEN BY
Peter Compton

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