The US Dollar was steady amidst thin trade this Friday, November 27th. However, it is on track to suffer from weekly losses when placed against a tide of other currencies owing to the pressure of boosting risk sentiment.
US Dollar Finds No Catalyst In The Market
US markets were shut down on Thursday, November 26th because of Thanksgiving. Senior strategist, Barclays, Shinichiro Kadota mentions in a statement that Saturday will be a quiet day for US Markets as there is no catalyst to liven up the market. The US Dollar is being broadly pressurized towards selling by the end of the month.
The US Dollar Index (DXY) dipped considerably over the past few days and was steady at the value of 92.03 as opposed to other major currencies. The three-month low for US Dollar hits at 91.84, a change that happened overnight.
The US Dollar has been under pressure to improve its risk sentiment in the market this week. This comes after riskier currencies made the most of positive news of the coronavirus vaccine. Over the past week, there have been major updates on the possibility of a coronavirus vaccine by early 2021.
Analysts Look Forward To Improved US Dollar Index After Positive Vaccine News
The vaccine news has shed positive light on the stock market, risk-sensitive FX market and commodity markets. It is like a light at the end of a dark tunnel that gives hope of financial stability in the country. The US Dollar Index is also expected to improve by 2021 as Joe Biden takes over the White House pointing towards a turning point in global relations and a positive time for international trade.
Despite increased optimism, the greenback continues to remain under pressure. Analysts at Barclays expect this pressure to linger on till term-end as the “risk on” sentiment in the US Market is high owing to vaccine news.
Kadota further mentioned in his statement that while looking at other major economies during the July quarter and how they made their rebound in the market, it can be said that the United States made a steady comeback. The rebound was strong and the economy showed signs of improvement. Kadota adds, if that was the scenario then, with a possible vaccine in 2021 and an improved state of normalcy, the US stands to be one of the strongest economies among developed nations. Kadota hopes that such a turnout will probably make a dollar-favorable environment.
Further assurances regarding the second round of stimulus package came from the chief economist of the European Central Bank who stated that the US Dollar value will improve once the economic aid is in place by the end of December.