The greenback is on its back foot again this week and is defending its gains against major currencies. The buck lost to most major currencies yesterday, but the GBP USD was the most-watched pair among its pairs.
Trade war optimism is playing a double-edged sword for the US dollar this week as traders wait for the signing ceremony. It could go both ways for the buck, meaning it could steeply fall or gain high altitude in coming sessions.
First, it could rally as a trade agreement between China, and the United States could lessen the chances of another rate cut. Then, it could weaken if traders’ appetite for safe-haven assets starts to fade along with tensions.
The pound currency also harnessed the optimism from the European Commission President’s comments to floor the greenback in yesterday’s sessions. The GBP USD pair rose by 0.30% or 0.0039 points in Monday’s trading.
Meanwhile, the EUR USD pair went up by 0.14% or 0.0016 points yesterday. And the AUDUSD climbed 0.29% or 0.0020 points in Monday’s trading.
20/20 on 2020
“Next Year” is just a few hours away, and the greenback will likely face a new set of hurdles. And it seems that the buck will start of the year in red territories.
Despite this, the US dollar index is still ending 2019 with a few gains, but it has fallen to just under 1%. This figure sets it on the record for the smallest yearly movement in about six years.
However, the buck’s 2020 outlook isn’t 20/20. Experts are having a difficult time trying to analyze the greenback’s future.
The new year will have the US Presidential Election, the continuation of the US-China trade war saga. Traders also have high expectations for the US fed to cut rates next year.
Things could go both ways for the US dollar, and as the market remains silent, traders could only prepare for the worst.