Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your experience. Save up to 40% More details

Forex - Dollar in Demand; Sterling Weighed by Downgrade

Forex Mar 30, 2020 03:19AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
© Reuters.

By Peter Nurse - The dollar is back in demand Monday as hopes of an early end to the shutdown which has paralysed the U.S. economy were dashed over the weekend, prompting some traders to head back to the greenback safe haven.

At 3:55 AM ET (0815 GMT), the U.S. Dollar Index, which tracks the greenback against a basket of six other currencies, stood at 98.965, up 0.4%. EUR/USD traded at 1.1078, down 0.6%, USD/JPY flat at 107.86.

On Sunday, President Donald Trump extended restrictive social distancing guidelines to the end of April, bowing to public-health experts who presented him with even more dire projections for the expanding coronavirus pandemic.

It was a stark shift in tone by the president, who only days ago discussed reopening the country in a few weeks. 

Additionally, GBP/USD traded at 1.2350, down 0.9%. Sterling has made something of a comeback in the last week or so, helped by the injection of vast amounts of dollars by the Federal Reserve into the system to stop a funding crunch.

However, more losses look likely for the pound going forward, especially after Fitch downgraded its credit rating on the U.K. by one notch to AA- from AA on Friday. The credit agency cited the significant increase in fiscal spending as a result of the coronavirus, as well as the uncertainty regarding the post-Brexit trade relationship with the EU. 

This is the first downgrade of a sovereign on the back of the coronavirus and the increase in fiscal spending. 

Another currency on the move on the back of a ratings decision is the South African rand, with USD/ZAR rising over 2% to 18.01 after Moody’s downgraded the sovereign to junk status.

South African government bonds will now be excluded from the FTSE World Government Bond Index, which will mean further capital outflows as fund managers with investment grade mandates will be forced to sell these bonds.

Finally, the sharp drop in the price of oil - Brent is down 5% Monday - continues to weigh heavily on the currencies of countries that rely heavily on the commodity for revenue. 

At 3:15 AM ET, USD/NOK traded 1.6% higher at 10.55, while USD/RUB climbed 1.6% to 80.06.

Forex - Dollar in Demand; Sterling Weighed by Downgrade

Related Articles

Dollar struggles to regain inflation-induced losses
Dollar struggles to regain inflation-induced losses By Reuters - Aug 11, 2022 1

By Alun John HONG KONG (Reuters) - The euro and Japanese yen held onto most of their overnight gains on Thursday, having been boosted by U.S. inflation data coming in less hot...

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at’s discretion.

Write your thoughts here
Are you sure you want to delete this chart?
Post also to:
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
Sign up with Email