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US dollar surges on renewed coronavirus panic

currency-newsUS dollar surges on renewed coronavirus panic

The US dollar pressed higher on Wednesday, rising on the back of fresh coronavirus uncertainty.

Meanwhile, the pound is trading in a narrow range this morning, with GBP/EUR buoyed at €1.1339 and GBP/USD flat at $1.2408. GBP/CAD is muted at C$1.7502, while GBP/AUD and GBP/NZD are holding steady at AU$2.0329 and NZ$2.0803 respectively.

Today the focus will be on US initial jobless claims as USD investors brace for another sharp rise in unemployment.

What’s been happening?

The US dollar found itself surging during yesterday’s session, with investors flocking back to the safe-haven currency amid renewed fears over the coronavirus crisis and its potential impact on global growth.

Building on these gains was the publication of the ISM manufacturing PMI, as US factory growth proved more resilient than expected in March.

The Pound also moved higher on Wednesday, with the UK currency extending its rally into its fifth consecutive session, and striking a two-week high.

However, Sterling’s advance slowed towards the end of the session as the UK reported that daily coronavirus deaths struck a new high.

Meanwhile, the euro tumbled yesterday, with concerns over the coronavirus’ impact on the Eurozone’s already fragile economy dragging on EUR sentiment.

This was highlighted by the release of the Eurozone's final manufacturing PMI, with factory growth in the bloc being revised even lower last month amidst a sharp drop in employment.

What’s coming up?

In the spotlight today we have the publication of the latest US initial jobless claims later this afternoon.

Having previously reported a record increase of 3.2 million new unemployment claims for the week ending 21 March, economists are forecasting claims will have accelerated as the coronavirus crisis prompted even more layoffs.

In the UK GBP investors will be keeping a close eye on coronavirus developments, amidst on going speculation the government could impose stricter restrictions.

Coronavirus headlines are also likely to continue dictating the direction of the euro, with the single currency likely to extend its downtrend unless there are any signs Europe might be turning a corner with its outbreak.

Philip McHugh

Philip McHugh

Joining the corporate trading desk in 2007, Phil now over sees all of Currencies Direct’s corporate dealing activity. Having gained experience working with hundreds of businesses to optimise international payments processes and execute comprehensive risk management strategies, Phil currently works with a portfolio of corporate clients whilst managing Currencies Direct’s overall market exposure

Phil has FCA approval and has completed the Certificate in International Treasury Management (CertiTM)

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