FOREX - U.S. Dollar Slides as Investors Continue Their Search for A Safe Haven

By Gina Lee

Investing.com - The U.S. dollar slid below the $100 mark on Friday morning in Asia after the United States was set to move forward on a $2.2 trillion relief package to deal with the fallout of the COVID-19 pandemic.

The U.S. dollar index, which tracks the greenback against a basket of other currencies, slid 0.11% to 99.435 by 09:46 PM ET (01:46 AM GMT).

Overnight, the U.S. recorded an unprecedented 3.28 million jobless claims for the past week, the highest increase ever. But hopes that the U.S. House of Representatives will also pass a $2.2 trillion stimulus package buoyed investor hopes and stock markets.

The GBP/USD pair gave up an earlier 2.8% gain as Asian markets opened, and was down 0.11% to 1.2188.

The AUD/USD pair gained 0.02% to 0.6065 and the NZD/USD pair gained 0.25% to 0.5974. After driving the dollar up last week by hedging against the two currencies, investors are slowly regaining their risk appetites.

The USD/JPY pair was down 0.86% to 108.64 and the USD/CNY pair lost 0.04% to 7.0735.

Analysts at National Bank of Australia warned in a report that asset managers may need to adjust their currency hedge positions after wild swings in global share prices.

“We can well believe that we are for an extremely rocky ride in the currency markets between now and month end,” they added.

“Some will not yet have adjusted, and some will now find themselves under-hedged given the big equity reversal so far this week. And, some may be looking to implement changes to strategic hedge ratios at the same time. Buckle up.”

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