The Federal Reserve has lowered its rates by a full percentage point to 0 to 0.25 percent, which is the record low last seen in 2015, while also pledging to increase its bond holdings by US$ 700 billion or more. Despite the Fed announcing this latest set of emergency measures to support the US economy from the ill-effects of the coronavirus outbreak, the Dollar index (DXY) showed only a limited decline before paring losses as it rose back above the psychological 98.0 level.

Asian currencies and stocks are currently mixed at the time of writing, while futures on the S&P 500 point fell 5 percent to hit limit-down, which suggests another day of heightened volatility when the US stock market begins trading for the week.

While King Dollar is clearly holding court in global markets amid the heightened risk aversion, other safe haven assets are showing a relatively muted response to the Fed’s emergency moves. Gold rose past the $1560 level before moderating, while the Japanese Yen couldn’t stay on the stronger side of the 106 handle versus the US Dollar for long, as Gold and the JPY could only manage to pare just some of Friday’s losses.

This week has begun with a fluster of global central bankers moving their policy interventions forward, unable to risk waiting any longer given the tremendous impact from Covid-19. The Bank of Japan is set to announce its policy decision in less than an hour from the time of writing, moving its policy meeting a few days earlier, while the Reserve Bank of New Zealand has cut its benchmark interest rates by 75 basis points and mooted the possibility of quantitative easing being rolled out in New Zealand. Still, global investors remain skeptical at this point in time over the effectiveness of such supportive policies in the face of great uncertainty stemming from the coronavirus outbreak, which should lend itself towards heightened volatility in global financial markets over the near-term.