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U.S. dollar rises on quarter-end flows

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 U.S. 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 U.S. 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 U.S. 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 U.S. 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.

Tuesday is the last trading day of Japan’s fiscal year and the end of the quarter for major investors elsewhere, which has fueled some volatility as big currency market players close their books. The bulk of those positioning changes caused the dollar to strengthen.

Currency bid prices at 10:15AM (1415 GMT)
 Description      RIC         Last           U.S. Close  Pct Change     YTD Pct     High Bid    Low Bid
                                              Previous                   Change                 
                                              Session                                           
 Euro/Dollar      EUR=        $1.0962        $1.1046     -0.76%         -2.21%      +1.1054     +1.0927
 Dollar/Yen       JPY=        108.1100       107.8100    +0.28%         -0.69%      +108.7200   +107.7500
 Euro/Yen         EURJPY=     118.54         119.07      -0.45%         -2.80%      +119.7000   +118.4700
 Dollar/Swiss     CHF=        0.9637         0.9583      +0.56%         -0.44%      +0.9676     +0.9581
 Sterling/Dollar  GBP=        1.2433         1.2416      +0.14%         -6.23%      +1.2440     +1.2253
 Dollar/Canadian  CAD=        1.4265         1.4169      +0.68%         +9.85%      +1.4348     +1.4154
 Australian/Doll  AUD=        0.6111         0.6172      -0.99%         -12.96%     +0.6213     +0.6080
 ar                                                                                             
 Euro/Swiss       EURCHF=     1.0564         1.0585      -0.20%         -2.65%      +1.0598     +1.0565
 Euro/Sterling    EURGBP=     0.8814         0.8886      -0.81%         +4.26%      +0.8968     +0.8814
 NZ               NZD=        0.5955         0.6013      -0.96%         -11.59%     +0.6037     +0.5929
 Dollar/Dollar                                                                                  
 Dollar/Norway    NOK=        10.5043        10.5474     -0.41%         +19.66%     +10.6075    +10.4039
 Euro/Norway      EURNOK=     11.5170        11.6400     -1.06%         +17.07%     +11.6690    +11.4250
 Dollar/Sweden    SEK=        10.0383        10.0059     -0.45%         +7.39%      +10.1327    +10.0038
 Euro/Sweden      EURSEK=     11.0055        11.0558     -0.45%         +5.12%      +11.1043    +10.9850

Source: Reuters (Reporting by Gertrude Chavez-Dreyfuss; Additional reporting by Saikat Chatterjee in London; Editing by Dan Grebler)

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