Dollar rallies as investors brace for global downturn
TOKYO, April 1: The dollar gained broadly against riskier currencies on Wednesday, with markets staring at what is likely to be one of the worst economic contractions for decades as the world locks down to fight the coronavirus pandemic.
The greenback advanced against the Australian and New Zealand dollars, sterling, and most emerging market currencies as fresh selling in global shares highlighted growing risks from the pandemic that has shown little sign of abating. The Australian dollar dropped 0.35per cent to $0.6115 AUD=D4 and the New Zealand dollar fell 0.3per cent to $0.5945 NZD=D4 while The British pound shed 0.4per cent to $1.2376 GBP=D4.
Emerging market currencies were hit harder, with the Mexican peso MXN=D4 falling more than 1per cent to 23.960 to the dollar, while the South African rand ZAR=D4 gave up 0.7per cent to 17.952 per dollar. Most Asian currencies also dropped.
While the dollar's status as the world's reserve currency makes it a natural safe haven, investors also flocked to the safe-haven yen, which gained 0.2per cent against the dollar to 107.33 per dollar JPY=.
The euro eased 0.2per cent to $1.1015 EUR= but gained against most other currencies as its vast liquidity is attractive at times of economic stress. -Reuters