The US Dollar is on track to record a 2% rise for the week, helped by a rise in oil prices and the move to safe-haven assets in the fallout from the panic stemming from the Coronavirus spread. The US Dollar Index, a measure that FX traders use to gauge the relative strength of the greenback, was up some 1.8% in the week, rising at one point to 100.210 .DXY. Analysts say that FX traders are wary of the release of the NFP numbers from the US Department of Labor. After the massive rise in new unemployment claims which had been reported on Wednesday, economists are forecasting a major slide into negative territory as businesses across the US close their doors to slow the spread of the virus. Analysts are also predicting that the unemployment rate will jump from 3.5% in February to 3.8% in March.
As of 10:31 am in Tokyo, the USD/JPY pair is trading higher at 108.0200 Yen, up 0.18% and off the earlier peak of 108.205 Yen. The EUR/USD was trading at $1.0848, down 0.0719%; the pair has ranged from a low of $1.08329 to a high of $1.08667. The Dollar was also higher against the Pound Sterling, with the GBP/USD at $1.2379, down 0.2056%, off the session high of $1.24142.
Recession Fears Grow
With the numbers of reported cases of Covid-19 rising, in some cases exponentially, on a daily basis, economists are predicting that the global economy will have contracted 18% during the first quarter of 2020, with future quarterly contractions seen as inevitable. What will make all the difference, they say, is how quickly governments respond to the threat and attempt to flatten the curve. The greatest concern is that the US, as the world's largest economy, won't adequately address the growing crisis. In that case, any hope that the global economy could be contained as a recession may evaporate as a worst case scenario surfaces.