As the European economy slows down further due to a possible second round of coronavirus restrictions, the Euro falls further. In addition to Euro’s disappointing performance, the fact that the US economy is reopening has resulted in the US dollar’s recent growth. In opposition to several major global currencies, the greenback is holding onto its gains.
As for the European economy, in addition to a possible second coronavirus lockdown, the German business sentiment data is also not looking good. Due to this containing Euro gloom, stock market analysts are predicting a gradual and consistent growth for the US dollar.
However, many have also pointed out at the immediate need of fiscal aid by the US Federal Reserve. With millions of unemployed American, many are desperately waiting for a second round of stimulus checks. However, the lawmakers in Washington are having a hard time coming to an agreement on the price tag of the stimulus plan. Even so, the Democrats, the Republicans, and the White House are in agreement that American needs a second round of stimulus checks.
A foreign exchange expert from Daiwa Securities, Yukio Ishizuki, told media sources that the US dollar is facing a huge unwinding as risk is now transacted across the board. The stock market is keeping a close watch on how the European governments are going to handle a second wave of coronavirus. Many have shown skepticism over the Euro, which is one of the main reasons why the US dollar is seeing a lot of stimulus float in.
On Thursday, the US dollar stood at $1.1656 per Euro.
Similarly, the US dollar held its position over the Swis franc with 0.9236 trading value. Likewise, the greenback stood at 105.45 yen.
The pound has possibly done its weakest in a long time as it bought $1.2705 against the greenback.
US Dollars Hitches A High Ride Over Fears Of Resurging COVID-19 Cases In Europe
After news emerged that several governments are planning on reinstating national or partial lockdowns, the stock market sentiment for the Euro is slowly deteriorating.
Even so, Foreign Exchange experts believe that this high will not last long unless the federal government releases another round of stimulus checks to revive the US economy.
On Thursday, the US index was 94.430 against 6 major global currencies.
As for other currencies, the yuan is holding steady with 6.8145 per US dollar.
The Chinese government introduced new quarts in their foreign exchange regulators, which has encouraged the country’s business to make overseas investments.
Even though the US dollar is doing well with regards to many foreign currencies, the Yuan is slowly but steadily firming grips with more foreign currency influx.