The dollar weakened across the board early yesterday as oil prices slumped and treasury yields hit a record low on what has already been coined ‘Black Monday’. This was to do with both coronavirus fears and the news that Saudi Arabia slashed oil selling prices in a bid to retake market share and put pressure on Russia.
US stocks also tumbled by nearly 7% at the start of trading yesterday, with the Dow Jones Index experiencing its biggest points slump ever. Trading was briefly suspended on Wall Street for the first time since 2008 to allow investors to pause and re-evaluate. After this, President Trump announced plans for payroll tax relief, which caused the markets to stabilise and the dollar to strengthen slightly.
Markets are pricing in another interest rate cut from the Federal Reserve next week, despite rates only being cut just last week. It’s likely that the dollar will continue to react to coronavirus related updates over the coming days and weeks.
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