Dollar sells off as investors buy risky assets on expectations the lockdown will continue to ease
The dollar is significantly weaker again today as traders move into riskier assets and sell the greenback. As month-end approaches, investors favor equities and emerging markets over traditional safe-haven assets. As Europe and other geographies ease lockdown restrictions, the dollar will lose ground. When cities in the US begin to exit the lockdown, the dollar may strengthen in anticipation of a return of economic activity.
April 28, 2020
EUR/USD 1.0851 GBP/USD 1.2450 USD/CAD 1.3958 AUD/USD 0.6488 USD/JPY 106.7400 USD/CNH 7.0750 USD/ILS 3.5014 USD/MXN 24.4568 USD/CHF 0.9740 USD/INR 76.1888
The dollar sank for a second day as risk-on sentiment returns driven by countries, primarily in Europe, beginning to loosen COVID-related lockdowns. The expected return of economic activity is leading investors to buy equities and move into emerging market investments. In many cases, this means selling US dollars.GBP
The pound is stronger on general US dollar bearishness despite the UK remaining on lockdown with no timetable yet for reopening.EUR
The euro headed for a third day of gains versus the US dollar as more countries on the continent began to ease COVID-related quarantines. The ECB meets Thursday and may announce additional bond buying measures to support the economy.CAD
The Canadian dollar is stronger despite the price of oil sinking again today. However, with oversupply of oil expected to lead to a shortage of storage space, the financial markets are increasingly looking at the July contract and other contracts with longer maturities to gauge a true longer-term price.ASIA/PACIFIC
The Japanese yen strengthened again today despite a general risk-on sentiment in global markets. The Bank of Japan yesterday announced an increase in Japanese yen denominated assets including equities.
The Peoples Bank of China continue to hold the renminbi in the 7.03-7.09 range as they await the slow increase in consumer spending to help boost the economy.
The Australian dollar traded above 0.65 and continues its steady climb. It is now up 12% versus the US dollar since the March lows.
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