The dollar nursed savage losses against the yen and euro on Friday as a plunge in U.S. yields to record lows wiped out the currency's single greatest attraction for investors - higher interest rates.
Mounting fears over the fallout from the coronavirus has driven a truly tectonic shift in expectations for U.S. rates as markets wager the Federal Reserve will have to cut rates by 50 basis points for a second time this month.
In particular, were the euro to close above the December peak of $1.1239, it would breach a down channel from August 2018 and signal a clear break of the bull trend.
The single currency was almost there, being up at $1.1226 (EUR=) on Friday having surged 0.9% overnight and a world away from the February trough of $1.0775. It was already up 1.9% for the week which would be the largest such gain since June 2017.
There were lots of other miserable milestones, with the dollar sinking to a six-month low on the yen at 105.96 having shed 1.2% overnight. The next bear targets were 105.72 and 104.44, lows from August and September last year.
Source : Reuters