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Riku Tanaka
April 1 20:32

FOREX - USD Demand Jumps as Global Economic Damage Worsens

Asia’s manufacturing statistics underlined a serious economic recession
USD exchanged a little higher Wednesday, in part due to its status as a safe-bet currency as Asia’s manufacturing statistics underlined a serious economic recession as the locale struggles to battle the coronavirus pandemic. 

At 03:10 AM ET (0710 GMT), the U.S. Dollar Index, which tracks the greenback against a basket of six other currencies, remained at 99.430, up 0.3%. EUR/USD fell 0.4% to 1.0980, while GBP/USD dropped 0.56 to 1.2353. USD/JPY rose 0.1% to 107.61. 
Manufacturing activity plummeted across the vast majority of Asia in March, as indicated by the most recent Purchasing Managers' Index overviews, with the region’s financial powerhouses Japan and South Korea posting their greatest drops in roughly 10 years. 
The dollar’s rise in value was constrained by the news that the U.S. Central bank expanded access for many international central banks late Tuesday, so that they can obtain the greenback during the coronavirus emergency by permitting them to trade their U.S. Treasury securities for quick dollar credits. 
“The Fed clearly wants to do everything it can to ensure dollar liquidity, which puts downward pressure on the dollar," said Kyle Rodda, an analyst at the brokerage firm IG Markets.
"But by the same token there is still this very structural push to buy dollars right now because liquidity is coming at an absolute premium with so much risk in the market," Mr. Rodda continued.
Among the regions that was hit the hardest has been Central and Eastern Europe, an area that is struggling to prevail in the financial downturn while simultaneously confronting political uncertainty. 
On Monday Hungary's Prime Minister Viktor Orban received the right to rule by decree indefinetly, undermining the standards of a majority rule government, while in Poland the ruling party is pushed ahead with May's presidential election notwithstanding the resistance, given the coronavirus pandemic. 
At 3:10 AM ET, EUR/HUF exchanged 0.4% higher at 362.44, EUR/PLN was up 0.5% at 4.5796 and EUR/CZK rose 0.5% to 27.459.