US Dollar in Trouble as Markets Cautiously Await Earnings Reports
Arslan Butt • 1 min read
The US dollar is trading cautious early on Tuesday as the market sentiment continues to be dominated by the coronavirus pandemic and its impact on the global economy. At the time of writing, the US dollar index DXY is trading around 99.19.
Even as headlines from around the world indicate no signs of the pandemic slowing down yet, traders are now worried about how this has affected companies’ earnings over the last quarter. Even though numerous organizations and economists have warned about the possibility of a deep economic recession, a look at corporate earnings will be able to paint a clearer picture of the extent of financial damage caused due to the virus.
Even though news reports look for signs of the coronavirus pandemic peaking in the US, the worst affected country worldwide, economic data releases are increasingly turning more pessimistic and adding to the strain on the US dollar. The dollar has also weakened after the latest trade data from China revealed a decline in exports and imports during Q1 2020 on account of coronavirus.
The risk-off sentiment prevails in financial markets and the weakness in the US dollar has failed to give a boost to other riskier currencies such as the AUD and NZD for now. Meanwhile, the safe haven Japanese yen continues to refer strong against the dollar, holding above a two-week high level for now.