Forex Comment Mar 30

Dollar rebounds on bad news weekend

Search for haven again revives greenback’s climb as Trump coronavirus U-turn signals more misery to come

by Uwe Parpart
Dollar rebounds on bad virus news weekend

(DXY) - The dollar index (DXY) jumped 0.7% in Asian trading to just above 99 in Asian trading Monday.

Blame (or praise if you're on the other side of the trade) the still rapid spread of the coronavirus in the US and Europe over the weekend, which portends extended and deeper economic woes ahead.

US President Donald Trump back-pedalled on "all-good-by-Easter" fantasies and back-pedalled as well on putting New York City under full lockdown and quarantine. Seems to be his favourite direction of travel these days.

US stock futures were still fluctuating at 8pm HK time. Wall Street's Monday could set crucial signals as JPMorgan thinks the worst is over for US stocks.

The People’s Bank of China set a relatively strong central parity for the Chinese currency on Monday morning (7.0447), but later the yuan dropped sharply as the central bank cut the interest rate it charges on loans to banks by the biggest amount since 2015, surprising many.

Is the post-virus back-to-work move not going as smoothly as hoped for? That's the big question for the yuan now, which traded at 7.0978 to the greenback at 8pm HK time.