The U.S. dollar bounced Wednesday amid rising concerns that the damage to the global economic system from the coronavirus pandemic shall be long and protracted, boosting the safe-haven appeal of the greenback.
A fall in oil prices on expectations that manufacturing cuts by OPEC may not be sufficient to support crude during a worldwide demand crunch also weakened riskier currencies, with the oil-exposed Norwegian crown and Canadian greenback down sharply.
The U.S. dollar had weakened in the earlier four consecutive sessions on cautious optimism that lockdowns have been slowing the spread of the virus.
However, analysts warn that it is still unclear whether economies will recover shortly or whether it’d take longer than expected.
Fresh financial data from the U.S. later on Wednesday is expected to indicate a sharp decline in retail sales, as well as hits to manufacturing and industrial production. This would be the first set of economic information outside U.S. unemployment claims.
The global economy is predicted to shrink by 3% throughout 2020, a collapse in the activity that will mark its steepest fall since the Great Depression of the 1930s, the International Monetary Fund stated Tuesday.
In European trading hours, the greenback recovered from earlier lows hit in Asian trading and rose 0.8% to only shy of 99.6 =USD against a basket of rivals, on track to interrupt a four-day losing candle.