Thu, March 28, 2024

Falling Dollar Steadies as Virus Worries Continue

The dollar is Set for Weekly Fall

The dollar nursed losses on Thursday after five sessions of declines.  Investors’ optimism about COVID-19 vaccines collided with worries about rising infections. Their enthusiasm ran into concerns about the risks to the fragile global economic recovery.

Small gains against most major currencies helped the dollar from Wednesday’s eight-session low. However, it remained near the month’s trough of 92.129.

Surging COVID-19 cases in the United States have brought opposing forces on the greenback, with a safety bid supporting it. New speculation of monetary easing to boost the economy has undermined it.

Concern has also pushed the Japanese yen about 0.8% higher this week. The safe-haven yen was regaining roughly three-quarters of the sharp loss it suffered last week. That was when Pfizer (NYSE:PFE) made an announcement on its COVID-19 vaccine.

The Japanese currency was steady at 103.80 per dollar, not far below its recent eight-month high of 103.18. Its Antipodean neighbors, the risk-sensitive Australian and New Zealand dollars, each eased about 0.2%.

In the eurozone, the euro (EUR=) faces pandemic problems of its own as lockdowns spread across the continent. Marginally it softened to $1.1846.

According to reports, Europe’s leaders would demand the European Commission to publish no-deal plans as the year-end deadline approaches.

In Asia’s forex, sterling slid 0.2% to $1.3237.

The South Korean won dropped 0.6% to 1,114.25 per dollar. Dealers said they suspected central bank intervention following the finance minister’s vow to act upon stabilizing the currency market.

Moreover, the Thai baht also softened for a second straight day. The central bank had intervened to slow its recent rise.

Fed to the Rescue

The dollar’s gains following the vaccine announcement have now almost evaporated. That’s because traders have quit safe haven currencies and selling pressure returned to the greenback through this week. 

Fiscal stimulus plans have gone by the wayside over President Donald Trump’s refusal to concede the election. This is consuming lawmakers’ attention. Speculation that the Federal Reserve may further loosen monetary at its December meeting is growing.

On Wednesday, two top Fed officials held out the option of doing more. Treasuries have rallied, anticipating a possible expansion of Fed bond buying.

UBS Global Wealth Management outlined a softer dollar as a pillar of their 2021 forecasts. This is mostly owing to the Fed holding rates very low for a long time.

All of that has helped lift the Chinese yuan, which has gained more than 9% against the dollar since May.  It was supported by a yawning yield gap.

U.S. jobs figures will be awaited on Thursday for guidance on the Fed’s next moves. Furthermore, European Central Bank President Christine Lagarde appears at a European Parliament Committee hearing at 1000 GMT in Frankfurt.

YOU MAY ALSO LIKE

Ford

Quick Look: CVA Family Office LLC snaps up 4,559 shares of Ford

The government aspires to make Portugal Europe's top producer of prime lithium for electric car batteries.

Quick Look: Atlas Lithium signs investment and offtake agreements with Mitsui. Mitsui

Stocks and various factors, Baltimore

Quick Look: The Francis Scott Key Bridge in Baltimore collapsed after a

COMMENTS

Leave a Comment

Your email address will not be published. Required fields are marked *

User Review
  • Support
    Sending
  • Platform
    Sending
  • Spreads
    Sending
  • Trading Instument
    Sending

BROKER NEWS

Plus500 Expands Office Space in Haifa and Boosts Hiring

Plus500 has significantly expanded its Haifa office space and increased recruitment efforts across various departments. Local news source Walla reports the brokerage has leased an additional 5,800 square meters in the Gev-Yam complex

BROKER NEWS

Stock Report – stock exchange background – WibestBroker

Plus500 Expands Office Space in Haifa and Boosts Hiring

Plus500 has significantly expanded its Haifa office space and increased recruitment efforts across various departments. Local news source Walla reports the brokerage has leased an additional 5,800 square meters in the Gev-Yam complex in