The euro was weaker against a basket of currencies on Wednesday. It lowered at 99.289 versus the dollar. Furthermore, the currency fluctuated between flat and a little firmer at $1.1021.
Investors have been trying to get a sense of the demand for the dollar by observing volatility in the U.S. Treasury market. The yield on the U.S. 10-year Treasuries benchmark rose 34 basis points so far. However, some analysts think that export-exposed currencies will rebound, and the demand on the U.S. dollar will disappear soon.
The kiwi lowered at $0.5959. The Australian dollar has dropped by more than 14% against the U.S. dollar this year. The currency fell below 60 cents for the first time since 2003.
How do the Pound and Yen fare?
The pound and the safe-haven yen made the efforts to rebound. The pound increased by 0.5% to $1.2110. The yen also rose by 0.5% to 107.18 per dollar.
However, investors sell nearly everything for dollars, while businesses hoard cash and draw loans to weather the crisis. Such tactics caused almost all major currencies to fall sharply.
Tentative moves in the currency market on Wednesday show that the central bank liquidity measures are beginning to service some of the demand for dollars.
The Bank of Japan plans the biggest injection of dollar funds since 2008. The bank suggested $30.272 billion in 84-day dollar funding on Tuesday as part of a pledge from six big central banks to offer discount dollar credit.
Meanwhile, the U.S. dollar fell insignificantly on Wednesday after the central bank took measures to ease some of the funding squeezes. However, it managed to retain most of the gains from overnight after it hit high due to the mounting fears about the fallout from the coronavirus crisis.
The central banks around the globe are trying to fight the economic shutdown caused by a coronavirus. As the pandemic spreads, lots of countries announce lockdowns. The total number of infection cases is approaching 200,000. So far, the virus has killed over 8,000 people worldwide.