The dollar is strengthening versus a basket
The dollar is strengthening versus a basket of other major currencies, with the Dollar Index gaining just over 0.5% during the early part of Wednesday’s session. Many investors are flocking to the greenback due to its safe haven status as bleak data continues to gather and point towards an unprecedented contraction for the world’s economy. It is interesting to note this dollar strength comes barely a day after the Fed announced robust liquidity measures in response to the surge in demand for the currency and illustrates the scale of the global appetite for greenbacks.
Ricardo Evangelista – Senior Analyst, ActivTrades
The gold price fell yesterday as low as $1,570, breaking down the first support level of $1,590 in the process, on growing fears that central banks will buy much less gold and other precious metals in the next few years. Despite this quick descent and despite the strength of greenback seen in the last few hours, bullion has managed to recover and is once again challenging the psychological threshold of $1,600, in a situation which remains volatile and dominated by uncertainty. In the next few hours bullion will be called to hold on around $1,590-$1,595 with any failure to do so confirming the weakness seen yesterday.
Carlo Alberto De Casa – Chief analyst, ActivTrades
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