US Dollar Trading Strong, Close to Four-Month Highs
Arslan Butt • 1 min read
The US dollar continues to trade strong against its other major peers over fears of coronavirus and its impact on global economic growth, even as regions like the Eurozone seem to be heading towards further slowdown. At the time of writing, the US dollar index DXY is trading at around 99.44.
So far, China has confirmed over 74,000 infected cases while the number of dead has crossed 2,000, continuing to impact several factories which remain shut as the government tries to contain the spread of the virus. This has caused global companies with supply chains in China to caution about potential slowdowns in production as the manufacturing of parts in China comes to a standstill.
The US dollar remains in favor as a safe haven currency owing to the high level of uncertainty in financial markets. Stock markets are also trading somewhat bearish after Apple warned that it will miss its quarterly revenue guidance in Q1 2020 over the slump in manufacturing in China and reduced demand for its products in Chinese markets.
Weakening investor confidence in Germany further increases the likelihood of prolonged economic weakness in the Eurozone, sending the Euro 3.7% lower against the dollar. Meanwhile, US Treasuries experienced a yield curve inversion in the previous session, a sign pointing to a possible recession in the economy.