US Dollar Under Pressure as Market Sentiment Boosted by Reopening of Economies

US Dollar Under Pressure as Market Sentiment Boosted by Reopening of Economies

Posted Tuesday, June 2, 2020 by
Arslan Butt • 1 min read

The US dollar is showing signs of weakness early on Tuesday as investors focus on the optimism surrounding reopening of economies, even as US-China tensions and the riots in the US pressure markets. At the time of writing, the US dollar index DXY is trading around 97.87.

The US dollar faced additional pressure following the release of the ISM manufacturing PMI data during the previous session which revealed a weaker than expected reading. Although the rate of contraction has improved from the 11-year low seen during April, the manufacturing sector continues to show signs of strain even as the US economy begins to reopen.

The risk-on sentiment in markets has helped the euro and the GBP test several weeks’ highs against the US dollar, even as the AUD climbs to the highest level seen since late January. Against, the Japanese yen, the greenback is trading somewhat range-bound.

However, the market sentiment experiences some pressure over mounting protests across US cities against the death of a black man in police custody, with President Trump authorizing the deployment of heavily armed soldiers and law enforcement officials. US-China trade tensions also remain in focus with China reportedly halting purchases of some farm products from the US, which could threaten the recently signed phase one trade deal.

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