The US dollar looks all set to post its highest weekly gain since earlier this month as it continues to strengthen on the back of the crash in crude oil prices from earlier this week. At the time of writing, the US dollar index DXY is trading around 100.56.

Early on Friday, the US dollar is trading close to a two-and-a-half week high and has already gained around 0.8% so far this week against its major peers. Against the euro, the USD is up by around 1% as worries about EU’s emergency fund exert downward pressure on the single currency.

The risk sentiment in global markets continues to be fragile and getting worse as recent economic data releases reinforce fears of an impending recession worldwide. The risk-off mood is lending support to the safe haven appeal of the US dollar, helping it rise higher against other currencies.

While economists had estimated a recession in the global economy this year in the wake of the coronavirus crisis, recent forecasts have revised growth estimates even lower as the pandemic rages on. In addition, against earlier expectations for a quick, V-shaped recovery, economists now expect the global economy to take longer to recover from the downturn, forecasting a U-shaped recovery for now instead.