The Dollar index (DXY) is halting its slump, after registering losses in six consecutive daily sessions to now test the 98.35 support level. With the Dollar-funding crunch easing, given that the Federal Reserve has worked with other central banks to improve the global financial markets’ access to the Greenback, the DXY’s declines appear to have fizzled out.
Demand for King Dollar should remain elevated, as the global economy enters a recession due to the Covid-19 pandemic. This suggests that the easy gains enjoyed by other currencies vs. the USD over recent sessions may have run their course. The US non-farm payrolls due this Friday, along with other global economic indicators to be released this week, will be used by investors to ascertain the potential severity of the economic contraction.
OPEC+ could flood markets on April 1
Brent prices began the week by sliding below the $27/bbl psychological level, while Crude is testing the $22/bbl mark and is trading around its lowest levels in 17 years. Global markets risk being flooded with cheap Oil supply on Wednesday, April 1, after OPEC+ producers are released from their existing supply cuts deal. The quarantine measures across major economies have resulted in an unprecedented plummet in demand, and the global recession should snuff out hopes of a swift recovery in the markets, barring any supply-side interventions by major producers.
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