|

US dollar index tumbles below 95.00, the lowest since Oct 2018

  • DXY tanks in sync with Treasury yields as risk-off worsens.
  • Coronavirus updates to drive the market sentiment.
  • Oil plunge also tempers the market mood.

The US dollar remains broadly battered for the fourth consecutive day on what seems to be Black Monday, with a flash crash seen across the fx space and Asian stocks smashed alongside Wall Street futures and Treasury yields.

With intensifying panic around the coronavirus outbreak globally and over 25% slump in oil prices, in the wake of the Saudi Arabian and Russian tussle, investors fled to safety in the US bonds to hedge the economic fallout, which led to over 30% crash in the US benchmark 10-year Treasury yields.

The 10-year US Treasury yields hit a record low of 0.477 in the last hour after USD/JPY saw a flash crash to the lowest levels since November 2016 at 101.59, which eventually dragged the US dollar to a new 17-month low of 94.90 against a basket of six major currencies. At the press time, the spot trades near 95.25, still down 0.75% on the day.

Moreover, CME’s FedWatch tool showed that markets see an 84% chance that the Federal Reserve (Fed) will cut its benchmark borrowing costs by 75 basis points when it meets March 17-18. The expectations of a steeper rate cut also exacerbated the pain in the buck.

Looking ahead, the risk-off sentiment amid heightening fears over global economic fallout from the infectious disease will continue to lead the way, as any macro news will play second fiddle.

US dollar index technical levels to watch

Dollar Index Spot

Overview
Today last price95.18
Today Daily Change-0.85
Today Daily Change %-0.89
Today daily open96.03
 
Trends
Daily SMA2098.55
Daily SMA5097.91
Daily SMA10097.83
Daily SMA20097.83
 
Levels
Previous Daily High96.67
Previous Daily Low95.71
Previous Weekly High98.03
Previous Weekly Low95.71
Previous Monthly High99.91
Previous Monthly Low97.44
Daily Fibonacci 38.2%96.08
Daily Fibonacci 61.8%96.3
Daily Pivot Point S195.6
Daily Pivot Point S295.18
Daily Pivot Point S394.64
Daily Pivot Point R196.56
Daily Pivot Point R297.1
Daily Pivot Point R397.52

Author

Dhwani Mehta

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

More from Dhwani Mehta
Share:

Editor's Picks

CLARITY Act approval odds sink fast ahead of Congressional hearing
The United States (US) House Financial Services Committee’s Subcommittee on Digital Assets, Financial Technology, and Artificial Intelligence (AI) is holding a hearing titled “Building the Future of Finance: How the CLARITY Act Unlocks Innovation” on Friday.
Week ahead – Could technology earnings revive equities as geopolitical risks linger?

Oil prices rise, but the dollar posts losses as Middle East tensions persist. US earnings, the ECB and UK newsflow dominate next week’s agenda. US equity markets face a pivotal test as focus shifts to technology earnings.

-0.4%: Why the biggest CPI drop since 2020 couldn't buy back a single cut

The June CPI fell 0.4% on the month, the largest one-month decline since April 2020, dragging the annual rate to 3.5% from May's 4.2% and snapping a three-month acceleration streak. Core prices went nowhere, flat on the month and down to 2.6% YoY, both under consensus.