The U.S. dollar rebounded slightly on its first trading session for the week.
What we know; At the time of writing the U.S dollar index, which gauges the greenback’s strength against a basket of other global currencies, edged up by 0.02% to 93.069.
That said, trading activity in the currency market has been feeble overall, due to a holiday in U.S. money and bond markets on Monday.
The U.S holiday observed is known as Columbus Day. It’s a type of federal US holiday that commemorates the arrival of Christopher Columbus to the Americas in 1492.
The U.S dollar index saw its biggest loss in six weeks on Friday on hopes that a deal for new U.S. stimulus would be reached.
President Donald Trump on Friday offered a $1.8 trillion coronavirus relief package in talks with House Speaker Nancy Pelosi – moving closer to Pelosi’s $2.2 trillion proposals.
Quick fact; The U.S. Dollar Index tracks the American dollar against a basket of other major currencies (like the Japanese yen, British pound sterling, Swedish Krona, and Euro). Individuals hoping to meet foreign exchange payment obligations via dollar transactions to countries like Europe, and Japan, would need to pay fewer dollars in meeting such obligations.
Stephen Innes, Chief Global Market Strategist at Axi with vital insights spoke on recent price action prevailing most USD pairs.
” I think that once the street digests the PBoC push back, the USD will continue to make new lows ahead of the election.
In EURUSD, there are no real levels of consequence ahead of 1.1950-1.20. USDCHF has broken support at 0.9130 and I do not see it getting back above 0.9160 now.
But USDJPY stands out to me as having not moved at all, but given what gold and USDCNH (even after PBoC interventions) are doing, there is a risk of another slip down to 104 area.
JPY, and AUD election weights and volumes, in general, remain under pressure. With the 1m having rolled over the US election on Nov. 3 last week, direct supply for election dates from the systematic sellers is not disappointing from a volume perspective.”
It’s fair to suggest that global investors’ present mood will be dampened on taking more risks, but the U.S dollar might be supported for now as global investors turn more cautious towards strengthened geopolitical uncertainty.
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