The dollar was up on Wednesday morning as investors flocked to the safe-haven greenback after a historical slide in oil prices overnight. WTI futures for May delivery plunged into negative pricing for the first time since trading began during the previous session.
“Oil is off its lows, but a lot of companies are going to get hit and companies could start to fail,” Shane Oliver, head of investment strategy and chief economist at AMP Capital Investors, told CNBC. “If share prices have a pullback, the dollar could see some gains as a safe haven. The only thing that’s capping the dollar is the Federal Reserve has done more quantitative easing than anyone else.”
The U.S. Dollar Index that tracks the greenback against a basket of other currencies gained 0.23% to 100.285 by 12:11 AM ET (5:11 AM GMT) as Asian stocks slid in response to the news.The USD/JPY pair was down 0.04% to 107.56.
The NZD/USD pair lost 0.68% to 0.5994 even as New Zealand prepares to ease some of its lockdown measures next week. Meanwhile, the AUD/USD pair lost 0.49% to 0.6304.
The Antipodean currencies reported losses as investors’ risk sentiment soured following oil’s slump. The two currencies are also closely tied to commodities and therefore sensitive to commodities price movements.
The USD/CNY pair gained 0.20% to 7.0862 and the GBP/USD pair lost 0.25% to 1.2405.