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The shared currency benefitted from the Fed’s emergency decision to slash interest rates to zero but the USD found some support from the coronavirus-led selloff in equity markets and capped gains, Haresh Menghani from FXStreet reports.

Key quotes

“The US dollar was hit hard by the Fed’s aggressive moves and prompted some short-covering. The US central bank slashed interest rates to zero and announced a massive bond-buying program to offset any negative impact from the coronavirus pandemic.”

“Another round of a selloff in the US equity markets extended some support to the greenback’s status as the global reserve currency and kept a lid on any runaway rally for the major.”

“The two-way price swings seemed rather unaffected by the disappointing release of the NY Empire State Manufacturing Index, which dropped to -21.5 in March as compared to +4 expected and the previous month’s reading of 12.”

“Market participants now look forward to the release of the German Zew Survey for March and the US monthly retail sales data for some impetus.”