The end of the world as we know it, but the USD feels fine...
I took my normal constitutional walk yesterday after breakfast and was greeted by our new post apocalyptic landscape. An eerie silence lingered in the air as there was a distinct lack of activity. REM's song immediately sprung to mine as I occasionally passed the odd dog walker who shuffled past me keeping a good distance, of course, from the potential that I was a COVID19 carrier. Welcome to our new coronavirus landscape.
And so returning to my terminal and more strange behaviour, albeit financial in nature this time, I was reminded of the USD as the king of currencies when it comes to a big crisis. In the 'sell everything' landscape the USD is being held as the most liquid currency. With 70% of all currency transactions involving the USD it is little wonder that the USD is attracting more and more bids. I have been explaining this for a few days now to traders and yesterday the USD was bid with a vengeance.
A look at the DXY
The Dollar Index is showing it all. The current monthly candle is engulfing around 14 previous months of dollar action putting in a strong potential bullish Engulfing bar on the monthly chart. For those who like to position trade there is an excellent option here to buy the DXY and come back next month. That will give you plenty of time to plan how you will survive the coming isolation as we try to ride out the coronavirus storm. I hope to meet you on the other side.
Our products and commentary provides general advice that do not take into account your personal objectives, financial situation or needs. The content of this website must not be construed as personal advice.
Recommended Content
Editors’ Picks

EUR/USD tests daily lows near 1.0350 on NFP
The buying bias in the Greenback gathers extra pace on Friday after the US economy created fewer jobs than initially estimated in January, dragging EUR/USD to the area of new lows near 1.0350.

GBP/USD flirts with daily lows near 1.2420, Dollar picks up pace
The continuation of the rebound in the US Dollar motivates GBP/USD to accelerates its losses and revisit the 1.2420 area, or daily lows, following the release of US NFP in January.

Gold tests fresh lows near $2,860 after NFP
Gold prices trim their early advance on Friday, deflating to the vicinity of the $2,860 region per ounce troy following the publication of the US labour market report in January.

Key takeaways from the January Payrolls report
The January payrolls number was weaker than expected at 143k, vs a reading of 175k. However, to counteract the downside surprise in the NFP number, the unemployment rate fell to 4% from 4.1%, and average wage data jumped by 0.5% on the month, to 4.1%, the market had been looking for a decline to 3.8%.

Top Trumps: The global economy’s House of Cards
The year has barely started and we are learning the hard way what Donald Trump’s second term in office means for markets, analysts and global policymakers. It's like living through an episode of the political thriller, House of Cards.

The Best Brokers of the Year
SPONSORED Explore top-quality choices worldwide and locally. Compare key features like spreads, leverage, and platforms. Find the right broker for your needs, whether trading CFDs, Forex pairs like EUR/USD, or commodities like Gold.