March 24, 2020 / 12:42 AM / 10 days ago

FOREX-Dollar near 3-year peak amid mad cash scramble

* Graphic: World FX rates in 2020

By Hideyuki Sano

TOKYO, March 24 (Reuters) - The dollar eased on Tuesday but remained near a three-year high against a basket of currencies as investors sought the world’s main funding and settlement currency ahead of a sharp anticipated fall in cashflow.

Market reaction was mixed to the U.S. Federal Reserve’s extraordinary array of programmes, its third emergency move this month.

The dollar index stood at 102.14, having dipped 0.3% on Monday but still not far from Friday’s peak of 102.99, its highest level since January 2017.

Against the yen, the dollar traded at 110.95 yen, having hit a one-month high of 111.59.

The euro ticked up to $1.0752 after touching a near three-year low of $1.0636 in the previous session.

The British pound stood at $1.1548, up 0.3% in early trade though it remained near its 35-year low of $1.1413 set last week.

“The market is still nervous about possible moves to cash everything, including unwinding of existing derivative positions,” said Kyosuke Suzuki, director of forex at Societe Generale.

The Fed announced unlimited quantitative easing and programmes to support credit markets on Monday in a drastic bid to backstop an economy reeling from emergency restrictions on commerce.

The programme includes purchases of corporate bonds, guarantees for direct loans to companies and a plan to get credit to small and medium-sized business.

While the move is likely to mitigate the blow for many companies in the long-run, investors remained on edge amid uncertainty about the extent of the pandemic.

Wall Street’s slide deepened on Monday as the rapidly spreading coronavirus forced more U.S. states into lockdown while Washington’s fiscal stimulus package remained stalled in the Senate.

Trading remained volatile, with the Australian dollar rising 0.75% to $0.5873, extending its recovery from a 17-year low of $0.5510 touched last week.

Market players are looking to a raft of business sentiment surveys in Europe due later in the day for a glimpse of how the virus is affecting the real economy. (Reporting by Hideyuki Sano; Editing by Sam Holmes)

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