Investors continued to flock to the safe haven of the U.S. dollar on Thursday, sending several other currencies to multi-year lows.

As CNBC reports, demand for the dollar has been boosted by concerns about the economic fallout from the coronavirus despite recent steps by world central banks to ease market stress.

“The strong U.S. dollar is slamming global capital markets like a sledgehammer today,” Stephen Innes, global chief markets strategist at AxiCorp, wrote in a client note.

The dollar index, which measures the greenback’s strength against a basket of six other major currencies, rose about 1.0% to 101.76 on Thursday, its highest since January 2017. The index is up about 3% for the week.

The euro was 1.31% lower at $1.077, its weakest since April 2017, as traders rushed to dump euro positions despite a fresh round of stimulus from the European Central Bank, while the British pound fell to its lowest level against the dollar since 1985.

“This is the worst sustained period of sterling selling that I can recall,” Neil Wilson, chief analyst for Markets.com, told BBC News.

The greenback also rose against the Japanese yen — a traditional safe haven currency — to its highest level since February and jumped to a record high against the Mexican peso.

“The dollar’s strength is, in effect, a powerful short-covering rally,” Marc Chandler, chief market strategist at Bannockburn Global Forex, said. “It was used to fund a great part of the global circuit of capital,” he added. “The circuit of capital is in reverse now, and the funding currency is being bought back.”

Global central banks have pumped in billions of dollars in emergency liquidity injections in recent days and strengthened swap lines with some global central banks but dollar funding pressures remained intense across the board.

Central banks in emerging markets are also in a “world of pain,” Innes said, as they can’t justify selling reserves of the dollar when their local banks are seeing a rise in demand for the currency.

“That merely signals more [U.S. dollar] strength to come as the buying frenzy continues,” he added.

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