On Wednesday, the US dollar is strengthening against risk currencies but losing ground against the safe haven Japanese yen as the second quarter of the year gets underway on a cautious note, dominated by concerns about the economic impact of the coronavirus pandemic. At the time of writing, the US dollar index is trading around 99.10.

Analysts anticipate weakness in the US dollar in the upcoming sessions as the Fed readies to roll out more stimulus efforts to support the US economy in the wake of the escalating health crisis. The mad rush for the dollar has also dipped at the beginning of a brand new month and quarter, driving more bearish moves in the currency.

On Tuesday, the Fed offered greater access to the US dollar for foreign central banks by allowing them to exchange their holdings of US Treasuries for overnight dollar loans. This helped ease the dollar lower, even though the market continues to trade with a risk-off sentiment.

However, the safe haven appeal of the dollar is likely to offer support to the currency as high levels of uncertainty could keep traders interested in liquidity in the near future. With recent data releases continuing to reinforce worries about an upcoming recession in the global economy, the US dollar could remain in favor over other riskier currencies and instruments for some time to come.