US Dollar Dips as Markets Focus on Positive Developments Surrounding Reopening of Economies
Arslan Butt • 1 min read
On Tuesday, the US dollar is trading weaker as the market sentiment improves over the reopening of economies, sending traders away from the safe haven greenback and towards riskier currencies. At the time of writing, the US dollar index DXY is trading around 99.63.
The start of the week saw a quiet trading session as most markets were closed due to public holidays, but the return of risk appetite has bolstered confidence in trading riskier instruments while sending the US dollar lower. However, the losses remain limited as US-China tensions also weigh on markets and keep traders from feeling too optimistic about economic recovery just yet.
In recent weeks, the market sentiment had stated improving as more countries signalled their interest in lifting lockdown restrictions and restarting economic activity. Amid the coronavirus pandemic driven recession, reopening of economies offers a glimmer of hope that the global economic recovery could get underway soon.
However, relations between the US and China continue to worsen ever since the Trump administration held China responsible for concealing the severity of the outbreak from the would, which led to an escalation of trade tensions. Diplomatic ties between the two world leaders have also come under strain of late over the US’s recent closeness with Taiwan even as China prepares to impose a national security law on Hong Kong.