Stocks Rally To Push the US Dollar from its Two-Month High

0
137
US Dollar

The US dollar came down from a two-month high when equities rallied together- straight after four weeks of declines. This came ahead of economic data slew, and a host of political developments in the country. With the US stocks rebounding last week, the climb of the US Dollar slowed down. This is quite a safe event, but there has certainly been a slow recovery in the economy after the political and pandemic uncertainties which have put almost all the investors on the back foot.

Some of the big indexes on Wall Street have started accelerating at more than 1% with several stocks bouncing forwards. This led to Nancy Pelosi, the U.S House Speaker, hoping that the growth in the economy would actually enable a deal to be reached in the White House regarding coronavirus aids. On the other hand, Edward Moya- the senior Market Analyst at OANDA mentioned that there was no reason to hope for yet another stimulus check so early. If the labor market suffered further losses, and the US Dollar climbed up, you could be looking at some resolution after the election.

Dilemma of the US Dollar

When stocks rise, there is no further possibility of having an even stronger dollar. There is a probability of that happening, but one could also see some choppy trade the rest of the week. The US Dollar index fell almost as low as 94.155. In quite jubilant news, the greenback did reach a high of 94.745- which was the biggest weekly rise for quite some time. Resting on the hopes that Britain would be able to secure a trade deal with Brexit, Sterling got traded last at $1.2884. On the other hand, the Euro gained quite a bit after dropping down to $1.16125 in the last couple of months.

Friday brought some hopeful data- the US Dollar could rise even further- as speculators have been holding quite a big net position which could get covered if the dollar moved even higher. The US Commodity Futures Trading Commission’s wide US Dollar measure position displayed the short net position of the speculator which rose up to $33.989 billion from last week. This was a rise from $31.524 billion.

The other side of the coin resulted in a net long position for the Euro which was quite large. The Euro inched up close to $27.922 billion. Now, all the attention from the investor would be aimed towards the US Presidential Debate scheduled for Tuesday. The Presidential Debate is going to take place amidst concerns that the economic recovery might fall into ruins. This is because most of the stimulus programs have already expired, which is severely curbing the spending of the consumers. And this will directly impact the US Dollar.

The current week is certainly going to bring forth even more information about the economic sector, and what investors should expect from the US Dollar in the face of the US Presidential Debate.