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Can central banks keep plugging leaks in the dam?

Adam Button from ForexLive talks about the coronavirus crisis in markets and how it’s affected the Canadian dollar.
“What’s happened is a US dollar funding crunch. The world runs on US dollars and there have been no other safe havens so everyone has been piling into the dollar. The relative stability of the loonie – as tough as that is to believe – is a good sign for the Canadian financial system. We’re not seeing the level of panic moves from the BOC as some other central banks are making. That gives me a sliver of confidence but my fear is that the market will crumble again when the first few waves of large-scale US testing begin.
For now, everyone is doing the only thing that works and that’s buying US dollars. Some fresh swap lines today have inspired a small reversal but nothing else is working so you have people piling in and the price action creates its own momentum. I’m newly hopeful that we’re close to a turn and I fear if we get another wave of USD buying, we’re going to see direct central bank intervention. If that’s the case, the safe haven flows are likely to shift into gold. That’s inevitable in any case, it’s just a matter of time because the costs of this are already out of control.”
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