In the last Friday trading, the U.S. dollar reportedly held steady. However, the currency remains on track for weekly declines against several other major currencies in global markets. The dollar is rumored to remain under pressure as the risk appetite increases lately.
It is due to various factors such as the presence of vaccines, and so on. U.S. markets were closed for the Thanksgiving holiday on a local Thursday. Shinichiro Kadota, a senior strategist at Barclays, said that without a market mover catalyst the USD was widely depressed.
It is especially on the end-of-month sale seen from the data. The U.S. dollar index was steady at 92.03 against several major currencies. However, the currency hit its lowest level in three months at 91.84 a few days ago. Will the situation continue in the coming days?
The Impact of Vaccine News
The dollar is under pressure this week. The situation is caused by risky currencies that benefit from optimism about the Covid-19 vaccine. Furthermore, there are also hopes of a more stable period of US politics under Joe Biden's leadership as the new US president.
The greenback is under pressure in the near future due to prolonged 'risk-on' sentiment due to vaccines. Kadota also added that the market expects the currency to strengthen in the medium term. This is considered quite important for the market.
The U.S. economy has improved and even recovered in the July quarter and rebounded strongly. It is in line with the vaccine scenario that is available gradually in the next year and the economy returns to normal just like before the pandemic.
The US will probably be one of the countries with the most resilient economic conditions. In fact, those conditions may also be able to create a favorable dollar environment. The dovish possibilities of the European Central Bank's chief economist are becoming attention.
Stimulus and the Further Economic Strategy
The possibility of dovish and the minutes of last month's meeting provide further confirmation of the stimulus that is expected to be realized soon. It is hoped that everything will happen next month or in December.
A treatise from the central bank at the October meeting showed that the policymakers agreed not to be complacent during the second Covid wave. They agreed to lay the ground on additional stimulus. That is like a weapon amidst this long-term pandemic.
ECB chief economist Philip Lane also warned that delivering a longer, even lower, phase of inflation could hurt consumption and investment in the world or global market. The move also strengthens expectations of low price growth in the future.
Meanwhile, the Euro stood at $1.1905 against the greenback. This is far from the two-month high achievement gotten of $1.1941. It was also flagged last Thursday. Sterling was reported at $1.3349, trading near a three-month high of $1.3399 touched Thursday.
How about the Brexit update?
It is undeniable that the market is always looking for progress on Brexit discussions. The EU's chief negotiator, Michel Barnier, said some of the bloc's ministers were responsible for fisheries. This is one aspect that is difficult to reach a consensus on until now.
They have a duty to discuss a wide range of circumstances in relation to trade discussions with the UK. Elsewhere, the Australian Dollar strengthened and was at 0.73605. That came after earlier climbing to near a three-month high of 0.7374 on Thursday.
Meanwhile, the Kiwis changed hands at 0.7006 against the USD. In the near future, it is predicted that the dollar and other currencies will continue to move due to the updated news. This is also the case in some commodities such as gold and oil.
