The U.S. dollar collapsed on Thursday as the U.S. President’s statements disappointed investors. Donald Trump spoke about several additional measures that would allegedly help the struggling economies.
However, traders think that those measures won’t be very effective against the coronavirus. Especially, considering that the World Health Organization declared that the outbreak has already grown into a pandemic. That announcment caused the new wave of panic in investors.
The greenback has been on down track for several days now. But after the sentiment dimmed on the markets, it fell sharply. The U.S. currency traded at103.32 against the Japanese yen on Thursday, lowering by 1%. Furthermore, it declined by 0.6% to $1.1333 against the euro and by 0.6% to the safe-haven Swiss franc.
Trump announced on Wednesday that travelers from 26 European countries would be banned from entering the U.S. for thirty days. Even though he seemed quite confident when declaring that the virus wouldn’t win against America, investors don’t share his assurance.
Some analysts also think that while Trump unveiled economic steps to counter the pandemic, he hasn’t spoken a lot about medical measures beyond assurances that “the virus has no chance against us”.Moh Siong Sim, the currency strategist at the Bank of Singapore, stated that the travel ban is only a part of the solution, while the more important parts are missing. Among them are public health measures, such as free testing, free treatment, and paid sick leave. Sim also added that after the disappointment from the White House, the market is looking for more action from the Fed.
What's happening in other countries?
Europe isn’t faring better then the U.S. Italy has shuttered all shops except food stores, supermarkets, and pharmacies after the deaths rose by nearly a third overnight on Thursday. Investors are waiting to see what will the European Central Bank decide at its meeting later on today.
Meanwhile, Australia tried to bolster its economy by announcing an $11.4 billion stimulus package on Wednesday. Despite that, the Australian dollar declined further with growing recession fears.