US Dollar Dips as Market Sentiment Receives a Boost From Trump’s Comments
Arslan Butt • 1 min read
Early on Wednesday, the US dollar is showing signs of weakness over an improvement in the market’s risk sentiment after US President Donald Trump signaled the possibility of restarting economic activity at least partially across the country. At the time of writing, the US dollar index DXY is trading around 98.93.
The promising news has sent investors towards riskier currencies and away from the safe haven of the greenback. Additional pressure on the US dollar was driven by the Fed’s latest move to boost the supply of the currency in markets.
The dollar’s losses are capped as an air of caution still remains, as public health experts have warned that it may be too soon for the US to reopen as infections continue to climb higher. The situation in the US still remains grim even though the death toll has fallen significantly in recent days.
The dollar is also somewhat bearish on account of the several efforts unveiled by the Fed and the government, including recent liquidity boosting measures, credit backstops and more stimulus measures. In addition to the numerous efforts already rolled out, the Fed started a new lending program on Tuesday to further boost the ailing economy.