Dollar slips but nears best week since 2008 financial crisis

The dollar neared its biggest gain in a week since the 2008 global financial crisis, even with a weakened rally, as the pandemic drove investors to cash and damaged the world’s financial plumbing.

The dollar hiked 3.7% against a basket of currencies as investors sold stocks, commodities, bonds, and gold in exchange for cash.

The Australian dollar rose 1.7%, to 0.5839 against the dollar. The pound gained 1.3% to $1.1636, after recovering from a 35-year low. The yen was up 0.6%, to $110.05.

However, signs of turmoil in the financial system, despite central banks’ efforts to inject dollars, investors expect a reversal.

California issued an order to its 40 million residents to stay at home as confirmed cases jump to 13,000 in the U.S.

Ray Attrill, NAB head of FX strategy, said that the USD might maintain its status for a few more months.

The dollar’s rise in recent weeks had been astounding, causing the Australian dollar to lose nealry 30%.

Investors’ rush for the dollar was seen in the bond market, where liquidity was rare.

In an attempt to ease the strain, the Fed launched a discount dollar funding facility to additional nine central banks.