US Dollar Set to Post Biggest Weekly Gain in a Month

The US dollar is set to post the highest weekly gains seen in a month as it strengthens as a safe haven currency amid worries of escalating geopolitical tensions and as a result of a second wave of coronavirus with cases rising across the world. At the time of writing, the US dollar index DXY is trading around 97.40.

Early on Friday, the US dollar is trading close to the highest level in two weeks and the DXY has gained around 0.4% so far this week, even as riskier currencies weaken. The Greenback has strengthened as tensions simmer between North Korea and South Korea as well as between India and China.

Meanwhile, there has been a renewed focus on US-China tensions after weeks of quiet after Trump threatened to cut ties even as talks between senior diplomats failed to make any progress. China has confirmed that it will honor the commitment to the phase one trade deal, but it has failed to thaw tensions, with Trump even warning to decouple the US economy from that of China’s.

The US dollar has been trading bullish over the past few sessions as countries like the US and China report an uptick in the number of infections. While Beijing has reimposed restrictions to contain a fresh outbreak, several US states have also observed a spike in the number of cases and hospitalizations lately, heightening fears of a second wave of the pandemic.