The decade's most triggering comedy
While the U.S. stock market has been bludgeoned by panic over the coronavirus pandemic, losing all of the gains made during Trump’s presidency, the U.S. has one thing going for it: the dollar is making gains unseen for nearly three decades.
“The dollar extended its gains on Thursday, putting it on its biggest rising run since 1992 against its peers, as demand for funding stayed high despite the recent burst of liquidity injection operations undertaken by central banks around the world,” CNBC reports. “Against its rivals, the dollar firmed 0.75% to 101.92, its highest level since March 2017. It has gained more than 7% in the past nine trading sessions. On an eight-day rolling basis, it is on its biggest rise since September 1992.”
The dollar’s strong performance, AxiCorp Global Chief Markets Strategist Stephen Innes notes, comes at the expense of the global markets. “The strong US dollar is slamming global capital markets like a sledgehammer today,” Innes wrote, as reported by CNN Business.
What’s fueling the dollar’s success? Credit Agriocole currency strategist Manuel Oliveri says it’s the failure of central banks to act aggressively enough. “Central banks are stepping up their liquidity actions but it is not enough to make sure the dollar scarcity disappear and as a result the dollar continues to be the favoured currency across the board,” said Oliveri, as reported by CNBC.
Meanwhile, the British pound and the Australian and New Zealand dollars are all nearing decades-long lows. “Sterling teetered near its lowest point since at least 1985 against the greenback, while the Australian dollar tumbled to a 17-year low and the New Zealand dollar was at its weakest in 11 years as investors dumped riskier assets,” CNBC notes.
The British pound has fallen to roughly $1.15, “trading at its lowest levels against the dollar since the 1980s,” CNN Business notes. Multiple sources told the network that the U.K. is now considering a “partial lockdown” in London to stem the spread of coronavirus, causing even more panic among traders.
The euro is also struggling despite the European Central Bank announcing an over $800 billion emergency relief measure.
In response to the crippling impact of the pandemic, the Trump administration is working with congressional leaders to pass a $1 trillion emergency stimulus package, which might include sending two $1,000 checks to many Americans, as reported by The Washington Post Wednesday.
“The administration’s $1 trillion proposed rescue plan, which forms the basis for fast-moving negotiations on Capitol Hill, includes sending two large checks to many Americans and devoting $300 billion toward helping small businesses avoid mass layoffs. Priorities laid out in a two-page Treasury Department document also include $50 billion to help rescue the airline industry and $150 billion to prop up other sectors, which could include hotels,” the Post reports.
“All told, between several legislative packages advanced on Capitol Hill and other actions the government has taken, the White House is pushing an economic plan that is ‘over $2 trillion and counting’ to try and arrest the coronavirus’s economic wrecking ball, a senior administration officials said,” the Post reports.
On Wednesday, President Trump tweeted out encouragement to the American people, promising that “money will soon be coming” to those hit hard by the crisis.
“For the people that are now out of work because of the important and necessary containment policies, for instance the shutting down of hotels, bars and restaurants, money will soon be coming to you,” the president tweeted. “The onslaught of the Chinese Virus is not your fault! Will be stronger than ever!”
For the people that are now out of work because of the important and necessary containment policies, for instance the shutting down of hotels, bars and restaurants, money will soon be coming to you. The onslaught of the Chinese Virus is not your fault! Will be stronger than ever!
— Donald J. Trump (@realDonaldTrump) March 18, 2020