The U.S. dollar remained low on Tuesday. Traders contemplated encouraging economic data and slow progress toward a U.S. government spending package, along with the steady rise of coronavirus cases.
Even though the greenback had its worst month in a decade in July, it began rebounding in August, rising as high as $1.1695 per euro on Monday. That is 1.8% above last week’s two-year low.
However, the dollar tumbled down again on Tuesday. It traded at $1.1755 versus the euro and 93.574 against a basket of currencies at last.
Meanwhile, the Japanese yen recovered some overnight losses against the U.S. currency. It traded at 106.08 per dollar. The Australian dollar soared as well. Though it was still 0.1% lower at $0.7117 ahead of a central bank meeting later on Tuesday.
What do the experts say?
ANZ Bank’s analysts stated that so far, it’s not clear if the dollar is making a proper come-back or if this is just a correction. While strong equity markets and better manufacturing are decent supports, the coronavirus cases are still rising rapidly.
Chicago Fed President Charles Evans declared that the next help for the U.S. economy must come from fiscal policy. Meanwhile, White House negotiators and top Democrats in Congress stated on Monday that they had made headway in talks on the latest coronavirus relief bill.
However, Alan Ruskin, Deutsche Bank’s chief international strategist, noted that the recovery cannot accelerate with the virus still not under control in large segments of the global economy.
Cases are surging again in Europe, while Australia’s second-biggest city of Melbourne announced a curfew and fresh restrictions on movement.
Chris Weston, the head of research at Melbourne broker Pepperstone, stated that traders may become more concerned, but the support needed now is not more easing of monetary policy, but fiscal. He doesn’t expect the Aussie to fell below $0.7085.
In Europe, the sterling traded steady at $1.3069 per dollar. Meanwhile, the Chinese yuan weakened in offshore trade, lowering at 6.9814 due to rising Sino-U.S. tensions. On the other hand, the New Zealand dollar climbed up to $0.6616.
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