US dollar rallies to highest levels in 3 years on fear of liquidity crunch
Investors move to the US dollar as anxiety around a global liquidity crunch intensify. Equity trading stopped abruptly in India and Indonesian following steep declines and bond trading seized up in Australia, Japan and South Korea. The fear is that as the coronavirus spreads, factories will suffer and stunt investment growth.
March 13, 2020
EUR/USD 1.1110 GBP/USD 1.2461 USD/CAD 1.3853 AUD/USD 0.6284 USD/JPY 107.2300 USD/CNH 7.0106 USD/ILS 3.6723 USD/MXN 21.3925 USD/CHF 0.9543 USD/INR 73.9113
USDThe US dollar climbed over 1% yesterday, hitting levels not seen in 3 years. This comes at a time when traders are moving to safe haven assets.GBPSterling is trading below the 1.2500 handle as the US dollar gains across the board. The currency pair has surpassed yesterday’s low and is trading at levels not seen since October.EUREUR/USD is trading below the 1.12 handle. There is technical support seen at 1.1100 ahead of the 55-dma at 1.1059.CAD
Canadian policy makers are increasing efforts to strengthen confidence in the economy. The central bank states they would send cash into funding markets and fiscal stimulus could also follow. Prime Minister Justin Trudeau is now in isolation after his wife tested positive for Covid-19.ASIA/PACIFICUSD/JPY moved as much as 2.4% higher on the broad dollar strength. The dollar held strength against the JPY following a pledge from the BoJ to keep liquidity plentiful.
AUD/USD rallied almost 1% following an announcement from RBA that they are adding AUD$8.8bn to the daily repurchase operations.