US Dollar Rallies Despite Mixed Data As Investors Pour Into Safe-Haven Asset

The US dollar is rallying against many major currencies midweek as investors continue to pour into the traditional safe-haven asset. Despite mixed economic data, the greenback is trading at its best level in three years throughout the Covid-19 pandemic that has crippled the global economy and paralyzed global financial markets.

Last month, retail sales tumbled 0.5%, down from the 0.6% jump in January. The market had penciled in a 0.2% increase. The 12-month retail sales rate is up 4.3%, down from 5%.
Industrial production edged up 0.6% in February, up from the 0.5% decline in January. Manufacturing output also picked up 0.1%, up from the 0.2% drop in the previous month. Analysts had anticipated gains of 0.4% and 0.3%, respectively. Capacity utilization clocked in at 77% in February, up from 76.6% in January. Business inventors fell 0.1%.
On the employment front, the number of job openings soared by 411,000 to 6.963 million in January, up from a revised 6.552 million in December. Experts projected a reading of 6.476 million.
In the housing market, mortgage applications slipped 8.4% in the week ending March 13, down from the 55.4% spike in the previous week, according to the Mortgage Bankers Association (MBA). Building permits slumped 5.5% in February, while housing starts declined 1.5%.
The world’s largest economy continues to be battered and beaten by the Wuhan coronavirus outbreak. The federal government has proposed a $1 trillion stimulus package and the Federal Reserve keeps pumping hundreds of billions of dollars into the financial markets, but these measures might not be enough as some of the biggest companies curtail operations and investors remain uncertain. The consensus is that until a vaccine is developed or the number of cases diminishes, market chaos will persist.
On Wednesday, the US stock market was another ocean of red ink as the leading indexes plunged around 5%. The Dow Jones Industrial Average officially eliminated all of the gains that occurred since President Donald Trump entered the White House. The benchmark 10-year Treasury note rose to 1.054%
The US Dollar Index, which measures the greenback against a basket of currencies, soared 1.1% to 100.68, from an opening of 99.38
The USD/CAD currency pair surged 1.57% to 1.4426, from an opening of 1.4201. The EUR/USD tumbled 0.8% to 1.0910, from an opening of 1.1000.

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