The dollar fell against a wide range of currencies on Monday, after the US Federal Reserve suddenly cut rates again.

This comes at a time when major central banks have taken steps to alleviate the dollar shortage and provide additional liquidity.

The US central bank cut its target interest rate range to between zero and 0.25% on Sunday, US time.

The bank said in a statement that the decision aims to mitigate the negative effects of the Corona virus on economic activity in the near term.

He announced the purchase of treasury bonds worth five hundred billion dollars and mortgage bonds worth two hundred billion dollars, and opened the door for lending to banks to urge them to help companies and individuals to overcome the repercussions of Corona.

The US Federal Reserve's move also comes less than two weeks after it cut interest rates by half a percentage point in an emergency move that failed to reassure worried investors, partly because it was not accompanied by steps by other policymakers.

Some analysts say the dollar’s ​​decline, probably short-term, because its shortfall in the global financial system means that there is continuous and long-term demand for it on the spot market.

The dollar fell 1.2% to 106.70 yen today, Monday, to exacerbate its losses after the decisions of the Japanese central bank.

The dollar also fell against the pound sterling by 0.4% to $ 1.2338, but saw no change against the euro, recording $ 1.1126.

The dollar fell 0.15% to 0.9493 Swiss francs, and in China, the yuan rose slightly to $ 6.9910.

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Pressure
Pressure is mounting on central banks to intervene to restore calm to financial markets, which have been hit by a worsening crisis caused by the spread of the Corona virus.

The Bank of Japan said at an emergency meeting that it would buy more corporate bonds and commercial debt and establish a new corporate lending program to join in global response measures to the spread of the disease that appeared in China and then moved to dozens of other countries and killed more than 5,800 people.

The bank decided to offer new loans for companies with a one-year interest-free period and to increase the maximum purchase of corporate bonds by two trillion yen ($ 18.8 billion).

And interest rates in Europe and Japan are already at the lower limits, i.e. close to zero or less, according to what Qatar National Bank mentioned in an analysis yesterday.

The bank’s analysis said that the dollar’s ​​recent depreciation is an exception to what can be expected normally. The analysis stated that the US dollar - as a classic safe currency - usually increases in value when investors face global emergencies, but what happened this time seems different.

Other central banks have taken measures to facilitate the provision of the dollar to their financial institutions, which face pressures in the credit markets.

The Monetary Authority (Central Bank) of Hong Kong decided Monday to cut interest rates by 64 basis points to 0.86% with the application of the cut immediately.

Yesterday the New Zealand central bank cut interest rates from 1% to 0.25%, to reduce the economic fallout from the spread of the Corona virus.