StockTop News

Dollar Hits More Than 3-Year-High Despite Fed Action to Calm Liquidity Fears

2 Mins read
imageForex17 hours ago (Mar 19, 2020 02:54PM ET)

(C) Reuters.

By Yasin Ebrahim

Invesing.com – The dollar rose to its highest level in more than three years on Thursday on higher demand as the dash for cash continued at a time when investors are concerned about potential liquidity issues despite the latest efforts from the Federal Reserve to calm investor fears.

The U.S. dollar index, which measures the greenback against a trade-weighted basket of six major currencies, rose by 1.40% to 102.57, its highest since Jan. 2017.

The Federal Reserve said it would expand the currency swap lines – a measure to boost U.S. dollar funding markets – to nine more countries, including central banks in Singapore, South Korea, Brazil, Sweden, Australia, New Zealand, Mexico, Norway and Denmark.

The extension of the currency swap lines are a sensible move by the U.S. central bank, said Sebastien Galy at Nordea Investments.

The pound, meanwhile, remained close to session lows against the dollar after the Bank of England on Thursday slashed rates and expanded its bond-buying program.

The Bank of England’s move would “create the space for the chancellor to announce further measures to help cushion the blow,” ING said.

While the central bank’s action is unlikely to stop a recession, the “hope is that many of these measures can help limit the increase in unemployment, and foster a swifter and smoother recovery when the virus shutdowns have passed,” ING added.

GBP/USD fell 0.51% to $1.556 after hitting a high of $1.1792.

Dollar Hits More Than 3-Year-High Despite Fed Action to Calm Liquidity Fears

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.