Early trade in New York: dollar climbs against majors

The dollar climbed against major currencies on Tuesday amid quarterly and fiscal year-end demand from portfolio managers and Japanese firms. Analysts said the steep fall in US equity markets during the month of March led to increased buying of dollars for asset managers seeking to rebalance their portfolios at the end of the month.
The US currency did pare gains after the Federal Reserve broadened the ability of dozens of foreign central banks to access dollars during the coronavirus crisis by allowing them to exchange their holdings of US Treasury securities for overnight dollar loans. But analysts said the dollar is likely to remain supported as investors brace for a sharp economic downturn in the coming quarters.
"The Fed's efforts so far are the closest thing to taming the dollar's strength," said Joe Manimbo, senior market analyst at Western Union Business Solutions in Washington.
"But the desire to hold dollars remains elevated ahead of what's expected to be a punishing second quarter for US and global growth," he added. In mid-morning trading, the dollar index was up 0.5% at 99.712. It reached 102.99, its highest in more than three years, earlier this month as a global market sell-off fueled a rush for dollars. Dollar demand has ebbed, but analysts are still forecasting more dollar gains. Against the yen, the dollar rose 0.5% to 108.31 yen on Tuesday.