Dollar Index trades on a solid foot near 99.80

• The flight to safety environment continues to bode well for the US dollar. 
• The global reserve currency has become a preferred haven amid heightened recession fears.

Persistent haven demand for the US dollar, a global reserve currency, is keeping the dollar index, a measure of greenback’s performance against its main rivals, better bid on Thursday. 

Pressing against MA hurdle

The index is chipping away at the 10-day moving average hurdle at 99.82 at press time, having put in a session low of 99.62 a few minutes ago. 

The market mood remains anti-risk, as evidenced by the 0.85% decline in the futures tied to the S&P 500. Investors are shunning risk, possibly due to fears of coronavirus led recession, triggered by the International Monetary Fund’s (IMF) forecast for a 3% decline in the global gross domestic product this year. 

Investors typically buy classic safe havens like the Japnese yen, Swiss franc, and gold during times of stress in the financial markets. However, lingering coronavirus scare has established cash, mainly the US dollar, as the king of tough times. 

The index advanced from 98.82 to 99.98 on Wednesday as the dismal US retail sales figure bolstered recession fears and triggered a flight to safety. The index, however, closed 99.57, up 0.72% on the day. 

The psychological level of 100 could come into play again or could be breached on Thursday if the risk-off tone worsens after the weekly US employment report. 

Technical levels