By Peter Nurse
The us dollar is in high demand this Tuesday, rebounding after losses on Monday, while other central banks seek to follow the aggressive stance of easing recently adopted by the u.s. federal Reserve.
At 10h05, EUR/USD was trading at 1,1105, down 0.7%. The index of the US dollar, which tracks the greenback against a basket of six other currencies, amounted to 98,610, an increase of 0.5%. USD/JPY rose 0.9% to 106,81.
Earlier on Tuesday, the Bank of Japan has injected more than $ 30 billion on the markets with a financing transaction of 84-day dollars, while the reserve Bank of Australia announced its intention to meet on Thursday, two weeks before the scheduled date, which suggests that another reduction in interest rates is in progress.
The global spread of the sars coronavirus resulted in a drop in the markets in recent weeks, prompting a flight to assets shelters, and the u.s. dollar in particular. The decision taken Sunday by the federal Reserve to reduce interest rates to a level close to zero has caused sales of the greenback, but the tone changed Tuesday.
The pound sterling has been one of the currencies with the weakest performance of the past few weeks. The Bank of England should hold its next meeting on 26 march, but a decision taken before this date may not be excluded due to the intensity of the crisis of the sars coronavirus.
The book has tended to show a weakness against the greenback and the euro in the current context of investors ‘ fear. A strong reduction of investments, british by international investors, could be responsible, all the more that the United Kingdom has adopted a position different from that of most of its peers in the fight against the epidemic of coronavirus.
Has 10h05, EUR/GBP was quoted at 0,9097, at the beginning of last week the pair was 0,8678. GBP/USD is now quoted at 1,2210$, and was at$ 1.32 per last week.