US Dollar Weakens as Markets Await Fiscal Stimulus Amid Rising Fears of Recession

Arslan Butt•Friday, March 27, 2020•1 min read

The US dollar looks all set to post the largest weekly decline in over a decade over escalating fears about an impending recession in the global economy even as the US gets closer to rolling out its massive fiscal stimulus package. At the time of writing, the US dollar index DXY is trading around 98.91.

The US dollar lost around 1.44% of its value in the previous session following the release of the latest weekly jobless claims data. According to the report, the number of Americans claiming unemployment benefits touched a record high of 3.28 million during the previous week, rising from the previous figure of 3 million.

Against other major currencies, the US dollar index fell by 1.5% as the data pointed to signs of an upcoming recession in the US economy due to the coronavirus pandemic, which continues to affect and kill more people in the country as well as around the world. For the week, so far, DXY has seen a 2.9% decline.

As we near the end of the month, choppy trading sessions are likely to keep the dollar under pressure as traders look to adjust their hedges in currencies. The dollar has also weakened after expectations of upcoming fiscal stimulus by the US government restored traders’ faith in equity markets again to some extent, driving a move towards riskier assets and away from the USD.

Check out our free forex signals

Follow the top economic events on FX Leaders economic calendar

Trade better, discover more Forex Trading Strategies

ABOUT THE AUTHOR See More

Arslan Butt

Index & Commodity Analyst

Arslan Butt serves as the Lead Commodities and Indices Analyst, bringing a wealth of expertise to the field. With an MBA in Behavioral Finance and active progress towards a Ph.D., Arslan possesses a deep understanding of market dynamics.His professional journey includes a significant role as a senior analyst at a leading brokerage firm, complementing his extensive experience as a market analyst and day trader. Adept in educating others, Arslan has a commendable track record as an instructor and public speaker.His incisive analyses, particularly within the realms of cryptocurrency and forex markets, are showcased across esteemed financial publications such as ForexCrunch, InsideBitcoins, and EconomyWatch, solidifying his reputation in the financial community.