USD continues to gain ground during this crisis as businesses increase cash in case of a recession. Treasuries and bonds are also considered the best for safe-haven and this will keep USD strong. The Federal Reserve introduced dollar swaps with many central banks because USD is the world’s reserve currency. Meanwhile, jobless claims for last week increased by 70K to 281K (previously revised to 211K and higher than expected 220K).
Canadian dollar highlights:
CAD remains weaker as the pandemic is worse than predicted and affecting the economy. Uncertainty and panic are dominating markets while crude oil prices tumble. CAD dropped to its lowest level against USD in 4 years. Consumer prices increased 0.4% last month, however, CAD will be under pressure until businesses reopen and economic activity returns to normal.
EUR tumbling as demand for the greenback increases. Germany is planning an emergency €40 billion stimulus package to support small businesses and self-employed (after the central bank announced a €750 billion pandemic emergency purchase program). EUR will remain weak while panic and stress in markets persist.
British pound highlights:
GBP weaker and under pressure as the government prepares to lockdown the city of London. In addition, the Bank of England cut interest rates to 0.1% and will add £200 billion in Quantitative Easing. The army will deploy troops to control and assist with the outbreak. New Governor Andrew Bailey also said he will do more if needed (after last week’s surprise rate cut to 0.25% and a new lending plan). GBP may decline further as the U.K. is paralyzed from the pandemic.