US Dollar Weakens as Risk Currencies Find Favor Among Traders

The US dollar has edged slightly lower over rising optimism about the US and China getting ready to sign the phase one trade deal soon.

Written by: Arslan Butt • Monday, December 30, 2019 • 1 min read

• Last updated: Monday, December 30, 2019

Early on Monday, the US dollar has edged slightly lower over rising optimism about the US and China getting ready to sign the phase one trade deal soon. At the time of writing, the US dollar index DXY is trading around 96.81.

Last Friday, the US dollar slid around 0.6% lower, falling below the 97 level against its major peers. So far in 2019, the greenback is set for the smallest annual gain seen since six years.

An improvement in the risk sentiment since the announcement of the partial trade deal has seen the safe haven appeal of the US dollar diminish as traders switch to riskier currencies like the AUD and NZD. Ever since the phase one agreement was confirmed, the Japanese yen has also weakened considerably over fading safe haven appeal.

Over the past week, despite the holiday season, US President Donald Trump announced that there will be a signing ceremony which will be attended by him and his Chinese counterpart, Xi Jinping. China also confirmed that both sides are in close communication regarding the phase one deal.

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ABOUT THE AUTHOR See More

Arslan Butt

Lead Markets Analyst – Multi-Asset (FX, Commodities, Crypto)

Arslan Butt serves as the Lead Commodities and Indices Analyst, bringing a wealth of expertise to the field. With an MBA in Behavioral Finance and active progress towards a Ph.D., Arslan possesses a deep understanding of market dynamics. His professional journey includes a significant role as a senior analyst at a leading brokerage firm, complementing his extensive experience as a market analyst and day trader. Adept in educating others, Arslan has a commendable track record as an instructor and public speaker. His incisive analyses, particularly within the realms of cryptocurrency and forex markets, are showcased across esteemed financial publications such as ForexCrunch, InsideBitcoins, and EconomyWatch, solidifying his reputation in the financial community.