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US dollar soars, IMF warns coronavirus could lead to worst slump since the great depression

currency-newsUS dollar soars, IMF warns coronavirus could lead to worst slump since the great depression
The US dollar roared back to life yesterday as a souring market mood saw investors clamouring for the safe-haven currency.

Meanwhile, the pound is off to a slow start this morning, with GBP/EUR muted at €1.14832 and GBP/USD slipping to $1.2478. GBP/CAD has dipped to C$1.7630, while GBP/AUD and GBP/NZD hold steady at AU$1.9856 and NZ$2.0954 respectively.

Looking ahead, investors will be focusing on the latest US initial jobless claims report.

What’s been happening?

The US dollar was back in vogue on Wednesday, with demand for the safe-haven currency surging after the IMF warned the coronavirus crisis may lead to the worst economic downturn since the great depression.

This saw USD exchange rates rally despite some worrying US data, which revealed domestic retail sales suffered a record contraction in March.

Concerns over the UK’s coronavirus outbreak limited the appeal of the pound yesterday, with GBP investors worried that cases are being significantly under reported.

Meanwhile, the euro was able to make broad gains as markets remained cautiously upbeat about the improving coronavirus situation in the Eurozone.

What’s coming up?

As the coronavirus continues dominating headlines and analysts estimate the eventual economic toll of the pandemic, investors will be focused on the latest US unemployment data.

Analysts are predicting another massive increase in unemployment claims in the first week of April, likely bringing the total claims since the start of the crisis to over 20 million.

The main point of interest in the UK will be the government’s announcement regarding its extension to the coronavirus lockdown.

EUR investors will be looking to the Eurozone's latest industrial production figures. A slump in output in February could weaken the euro.
Philip McHugh

Philip McHugh

Joining the corporate trading desk in 2007, Phil now over sees all of Currencies Direct’s corporate dealing activity. Having gained experience working with hundreds of businesses to optimise international payments processes and execute comprehensive risk management strategies, Phil currently works with a portfolio of corporate clients whilst managing Currencies Direct’s overall market exposure

Phil has FCA approval and has completed the Certificate in International Treasury Management (CertiTM)

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