By Peter Nurse
The dollar is once again asked Monday, as hopes of putting a swift end to the shutdown which has paralyzed the american economy has been wiped over the weekend, which prompted some traders to return to the haven of the greenback.
At 9: 50 am, the u.s. dollar index, which tracks the greenback against a basket of six other currencies, was $ 99,055, up 0.5%. EUR/USD is traded at 1,1069, a decrease of 0.6%, USD/JPY is in progress of 0.3% to 108,20.
On Sunday, president Donald Trump has extended until the end of April the restrictive directives regarding social distancing, bowing to the public health experts who had submitted forecasts are even more alarming regarding the expansion of the pandemic of sars coronavirus.
This was a change of tone, abrupt in the hand of the president who, a few days ago, spoke of the reopening of the country in a few weeks.
In addition, GBP/USD is traded at 1,2332, down 1%. The pound sterling has made a comeback for about a week, helped by the injection of vast sums of money by the federal Reserve in the system to put an end to a funding crisis.
However, further losses seem likely for the book in the future, especially after Fitch has lowered by one notch its credit rating on the United Kingdom, which increased from AA to AA – on Friday. The credit agency cited the significant increase in budgetary expenditures due to the coronavirus, as well as the uncertainty concerning the commercial relations with the EU after Brexit.
It is the first degradation of the note of a sovereign due to a coronavirus and the increase in budgetary expenditure.
The south african rand is another currency movement due to a decision of rating, with USD/ZAR, which has risen over 2% 18,01 after that Moody’s has downgraded the rating of the sovereign to the rank of junk.
The obligations of the State of south african will now be excluded from the FTSE World Government Bond Index, which will lead to further capital outflows as fund managers with mandates of quality will be forced to sell these bonds.
Finally, the sharp decline in oil prices – Brent crude fell 6% on Monday – continues to weigh heavily on the currencies of countries that depend heavily on this commodity for their income.
At 9: 50 am, USD/NOK is trading at 10,55 increase of 1.6%, while USD/RUB has climbed from 1.6% to 80,06.