The US currency is currently leading the financial economy, taking the blows of an almost agonizing global economy and energetic US economy. Analysts say that the dollar manages to maintain stability in most cases, although it comes at a difficult price.
After surviving the recent decline, the dollar regained its position. The catalyst for this gradual growth was the panic of the market regarding the future prospects of the global economy. On Wednesday, April 15, the US currency appreciably increased, overtaking most other currencies, as concerns about the negative consequences of the coronavirus pandemic (COVID-19) are gaining impulse. Moreover, the dollar rose in relation to other defensive assets: to the yen - by 0.2%, to the Swiss franc - by 0.6%. On Thursday, this trend continued on April 16.
Experts believe yesterday's dollar rally is the turning point for the currency, divided as the USD is relatively stable in early April, and the highly volatile second half of the month. Previously, such sharp fluctuations were noted in March, when the dollar rose rapidly against the backdrop of a collapse in world markets. In March, experts recorded a runaway in the dollar, while market liquidity was consumed. Most investors literally fought for dollars, which is why the Fed had to fill the markets with money. Analysts emphasize that the regulator fully satisfied the market's craving for the US currency. Fresh monetary stimulus from the Fed boosted demand for US assets, raising it to an unprecedented height. At the same time, the regulator expanded its bond buying program, providing new credit opportunities to businesses and markets.
The downside of the full-scale stimulus measures taken by the Federal Reserve was the explosive growth of dollar liquidity. As a result, the dollar was under pressure, while the demand for it continued to increase. According to analysts, demand for USD will remain high in the near future, since the time for mass withdrawal from safe haven assets has not yet come.
It can be noted that the US currency has shown a decline over the past four trading sessions. Experts consider that the reason for this is cautious positivity regarding possible reduction in the number of deaths from the coronavirus COVID-19 and approaching the peak incidence in the United States. However, the situation with patients and deaths from coronavirus in America is far from positive now. In the wake of current gloomy prospects, the dollar managed to strengthen its position, remaining the last island of hope for investors. On Thursday morning, April 16, the EUR/USD pair started at 1.0898 - 1.0899, having lost a number of previous gains. A day earlier, the pair reached the level of 1.0990, but could not stay on the upside. During the trading hours on Thursday, the EUR/USD pair immediately declined from time to time, trading in the range of 1.0879 - 1.0882.
According to experts, such decline is not caused by the weakening of the euro, but by the strengthening of the US currency throughout the spectrum of the market. According to analysts, the dollar showed a strong character in all dollar pairs, turning the price movement in a direction favorable to itself.
According to experts, such a reversal may become the impulse of the next decline of the dollar. Earlier, the American currency was already retreating on all fronts, although analysts believe that this surrender may turn out to be an acceleration before a strong jump. On the other hand, the current position of the US currency looks quite shaky, despite the impulsive growth. The dollar's confidence is hindered by the excessive inflow of money into the economy, initiated by the Federal Reserve. Experts believe that inserting new funds will accelerate inflation, and this will slowly crumble the value of the USD. However, a negative for the dollar can turn into a positive for the global economy, since a moderate weakening of the dollar will lead to an acceleration of its growth, an increase in demand for oil and a recovery in the quotes of other world currencies, which collapsed at the beginning of the year.
