NEW YORK: The dollar rose on Wednesday as investors turned more cautious on riskier assets amid growing worries about the economic impact of the COVID-19 pandemic and as a downward revision to Germany’s growth forecast weighed on the common currency.
Investors showed an aversion to riskier assets on Tuesday with stocks and Treasury yields slipping while the safe-haven US dollar drew buyers.
“Today is a solid risk-off day for sure,” said Minh Trang, senior FX trader at Silicon Valley Bank.
The US Dollar Currency Index was 0.56% higher at 90.666, its highest since January 18.
The euro was further pressured after the German government on Wednesday slashed its growth forecast for Europe’s largest economy to 3% this year, a sharp revision from last autumn’s estimate of 4.4%, caused by a second coronavirus lockdown.
The euro was 0.59% lower in the day against the US dollar.
The risk-sensitive Australian dollar sank 0.79% to $0.7682, while the New Zealand dollar 0.83%.
Meanwhile bitcoin fell about 8% in a volatile session, slipping below $30,000 for the first time since Jan. 22.