The US dollar strengthened slightly with a stable trend without the release of high-impact economic data. The currency was bought back as a safe-haven, so investor concerns about global growth shocks resurfaced.
Although the scheme of reopening US economic activities announced by Donald Trump had aroused risk interest at the end of last week, the market doubted that the plan would succeed.
In the American session, Monday (20 / April) night, the US Dollar Index (DXY) rose 0.1 percent to 99.82. Meanwhile, USD / JPY rose 0.1 percent to 107,658, not far from levels formed since last weekend.
Risk interest has evaporated since the opening of the Asian session this morning, precisely after Japan reported a decline in exports to the largest margin in four years. Oil prices have also been crushed to a 21-year low. This reflects that the global demand for oil has dropped dramatically.
"There is still a level of support for safe-haven and demand levels for the US Dollar, which will determine whether we will be in risk appetite sentiment or risk aversion sentiment," said Ray Attrill, forex analyst at National Bank of Australia (NAB).
Discussion on Lockdown Easing Planning
This week, the United States will again announce its employment data. Finally, US Unemployment Claims declined slightly, although they were still very high. Eurozone economic indicators surveys were awaited, especially amid the issue of the collapse of the European Union economy. The euro was one of the weakest performing currencies versus the US dollar today, with a 0.2 percent decline to 1.0856.
"We are heading for a whirlpool of storms," said Chris Westin, Pepperstone analyst quoted by CNBC. "And because the market is starting to reduce its focus to news of the Coronavirus development, or at least it won't be too sensitive to good news anymore, we will focus more on the ongoing impacts on the economy and solvency."
US President Donald Trump sparked a discussion about a lockdown easing plan at the end of last week. This topic had raised market risk interest. However, the risk-off action resurfaced in early trading this week (20 / April) because many parties were skeptical about the prospect of easing lockdown soon.
Against this background, the US Dollar Index (DXY) climbed around 0.3 percent to 99.95; still sideways in the range formed last weekend. The greenback - which is still considered the safest currency during this crisis - has been observed to strengthen versus the Aussie, Pound, Euro, and Japanese Yen.
Lockdown Relaxation Policy in Several Countries
Last week, US President Donald Trump released a three-stage guide to normalizing economic activity. The guide was made as a directive for state governors to loosen lockdown as soon as health facilities were able to carry out massive COVID-19 tests in their region.
The guidelines received mixed responses from the governors. Several state governors consider that it is still too early to consider lockdown easing. Strong Republican-based states such as Texas say they will implement the guidelines soon.
However, many parties warned that there would be a surge in COVID-19 cases if an economic activity was normalized too quickly. Last week, the state of Florida set the record for the largest number of daily deaths on the same day as the reopening of their beach access.
Many other developed countries said that they have not considered easing lockdown. Britain, Ireland, and Canada, compactly stated that social restrictions will be enforced for a long time.
"The barriers facing optimistic people are huge," said Sean Callow, forex analyst at Westpac, "We are entering the third week in a quarter that seems to be the worst (quarter) in a decade globally. For us, despite the momentum, it could be in favor of risk appetite for a little longer, we think (positive sentiment) is very fragile and will be immediately withdrawn.
