Growing coronavirus fears propel dollar to a three-year high
The U.S. dollar index surged to a three-year high amid the unyielding coronavirus fears, and it continues to hound financial markets forcing investors to run to the safe-haven dollar.
Investment assets that are time-tested and shockproof amid financial turmoil are rallying since the coronavirus outbreak and piled huge problems over big financial firms including the mighty Wall Street. As the number of cases of people infected the new coronavirus increases, the amount of economic hazard it has brought starts to become incalculable.
The United States, known to be less dependent on export and trade activities, makes it an invincible economy and its currency a safe-haven.
The Atlanta Reserve’s GDPNow model predicts a 2.6% increase in the first quarter of the year. The U.S. dollar is also in the best position to be attractive in the market, according to Francesco Pesole, a strategist at ING.
However, the rising of the dollar seems to be at the wrong time for multinational corporations as foreign earnings could be hit by the slowing currency of other countries like China. Coupled with the virus fears, the multinational companies’ profit figures could be in jeopardy.
Recently, Apple has announced it won’t meet its first-quarter target revenue due to the ongoing epidemic onslaught. Other companies might follow suit before the next financial period begins.