US Dollar Rallies Amid COVID-19 Global Pandemic Declaration

The US dollar is making a late-day rally against multiple currency competitors midweek after the World Health Organization (WHO) officially declared that the coronavirus is now a global pandemic. The greenback had been relatively quiet in the middle of the trading week, but investors fled to the traditional safe-haven asset following the international body’s announcement.

WHO Director-General Dr. Tedros Adhanom Ghebreyesus confirmed at a headquarters news conference in Geneva the number of confirmed cases outside of China has skyrocketed. He and his colleagues anticipate the figures will climb even higher in affected countries, blaming leaders for not acting as quickly as they should have.

In the past two weeks the number of cases outside China has increased thirteenfold and the number of affected countries has tripled. In the days and weeks ahead, we expect to see the number of cases, the number of deaths and the number of affected countries to climb even higher.

We’re deeply concerned both by the alarming levels of spread and severity, and by the alarming levels of inaction. We have rung the alarm bell loud and clear.

Ghebreyesus noted that 81 nations still do not have any cases, while 57 nations have 10 or fewer cases. He clarified that “all countries can still change the course of this panic,” citing states “struggling” with capacity, resources, and resolve.
China appears to have gotten a grip on the Wuhan coronavirus, but other countries are beginning to see significant increases, including Italy, Iran, the US, and potentially Qatar. In total, there have been more than 4,300 deaths and more than 120,000 confirmed cases.
The US stock market had already plunged more than 900 points before the announcement, mostly due to a paucity of urgent fiscal response by the US government. But the Dow Jones Industrial Averages added to its losses with a little more than an hour until the closing bell as the leading stock index fell roughly 1,400 points. The S&P 500 dropped 4.7% and the Nasdaq Composite Index shed 4.5%.
On the data front, the February inflation rate edged up 0.1%, lowering the 12-month rate to 2.3%. The core inflation rate was unchanged at 0.2% last month. Also, the US budget deficit narrowed to $235 billion in February, which might add to greater uncertainty over lawmakers being able to act on an aggressive fiscal stimulus package. The White House has discussed a 0% payroll tax cut for the rest of 2020, wage relief, and paid sick leave.
The US Dollar Index, which is a measurement against a basket of currencies, picked up 0.1% to 96.50, from an opening of 95.91. The index had fallen as much as 0.5%.
The USD/CAD currency pair rose 0.22% to 1.3758, from an opening of 1.3727, at 18:08 GMT on Wednesday. The EUR/USD fell 0.03% to 1.1282, from an opening of 1.1284.

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