The US dollar continued to be in high demand on Tuesday as firms and traders across the globe built up their reserves of the highly liquid currency.
Traders also appeared to show a low appetite for risk over the course of the day as the coronavirus continued to wreak havoc on markets, countries and communities around the world.
Across the globe, many non-dollar currencies exhibited serious declines.
Three-month long cross-currency basis swap spreads for the euro/dollar pair went up by as much as 120 basis points at one stage, which reflected a real surge compared to Monday.
At that stage, this measure was noted at under 90.
Now, it stands at its highest point since the debt crisis which engulfed the Eurozone almost a decade ago.
The dollar has surged in recent days as traders began to truly fear the impact of the coronavirus crisis.
The US dollar index, a tool designed to track how the greenback is doing relative to certain other countries across the globe, was up by 5% in just eight days or so.
It was most recently seen up by more than one percentage point on the day, noted at 99.43.
Many traders are now calling on the country’s Federal Reserve, which is its central bank, to provide support for a market referred to as the “commercial paper” one.
The commercial paper market is essentially a market for unsecured debt and is commonly used by firms looking to prop themselves up with short-term borrowing.
The US dollar’s rise also indicated that traders are prioritising liquidity over the results of specific economic data releases.
Retail sales figures went down in the US in February, for example, a development which proved the growing trend of decreased consumption in the wake of the coronavirus outbreak.
However, this did not appear to be enough to stem the demand for the dollar, which appeared to rise primarily because it is an asset that can be accessed, bought and sold with relative ease.
Elsewhere around the world, the Australian dollar was in its worst position since 2003 in its pair against the all-dominant dollar.
It was seen at $0.6013 at one stage, which represented a drop of almost 2%.
The Australian dollar is particularly sensitive to the rises and falls of the global economy as it is a big exporter of important commodities.
The Reserve Bank of Australia, which is the country’s central bank, has said publicly that it will do something – like ease monetary policy – if it has to.
On Tuesday, rumours abounded that this could come as early as this week.
The single European currency experienced a drop of 1.63% in its pair against the US dollar to $1.10.
The coronavirus is now believed by some to have inflicted one of the worst economic shocks to hit the global system since the Second World War.
Many traders and analysts remain uncertain about what the next developments may be.
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