On Thursday, the 5th of March 2020, the American currency had faltered to a fresh two month low and the US 10-year treasury notes had fallen to a new low below 0.90 per cent, as investors were betting heavily on growing possibility of further rate-cuts following March FOMC minutes.
In point of fact, latest media headlines of possibilities of further rate-cut which had led to a havoc-scale US dollar sell-off on Thursday’s (March 5th) FX market came forth a couple of days after the US Fed had slashed its key interest rate by 50bps to a target range between 1.0 per cent to 1.25 per cent aimed at insulating the US economy from a fast-spreading coronavirus outbreak.
Nonetheless, as newer cases of coronavirus have been rising sharply in the United States with two US states reported their first coronavirus cases on Thursday (March 5th), the US Dollar index (DXY) measured against a basket of six major currencies on an average was plunged by 0.8 per cent to 96.63 after hitting an intra-day low of 96.60, its weakest level since January 6th.
Meanwhile, as the global FX markets alongside option traders were putting their money on safe-haven assets such as gold alongside euro which appeared to have received a safe-haven appeal over the recent past despite a strident rise of newer coronavirus cases in Italy with death tolls raising to as many as 80, a senior FX market strategist at Tempus Inc.
in Washington said on Thursday’s (March 5th) market wrap-up, “The cuts were emergency, so it’s worth wondering, will the Fed strike again like this or will they telegraph another move? It seems like they’re willing to help at any point, thus the lack of faith in the buck is understandable.
” Aside from that, the American currency fell nearly to a six-month low against safe-haven Japanese Yen to 106.22 yen, while the pound sterling gained as much as 0.7 per cent against the greenback to wrap up Thursday’s (March 5th) market at $1.2953 and the bloc’s common currency surged 0.93 per cent against its American counterpart to settle down at $1.1236.