US Dollar Weakens as Markets Look Forward to Economic Recovery
Early on Wednesday, the US dollar is trading somewhat weaker on the back of better than expected PMI readings from the Eurozone, which has raised hopes for faster economic recovery in the aftermath of the coronavirus pandemic. At the time of writing, the US dollar index DXY is trading around 96.65.
While the upbeat figures helped the Euro climb to a one-week high against the US dollar, the AUD also managed to post some gains against the greenback on early trading – pointing to an improvement in the market’s risk sentiment. However, the NZD has weakened on Wednesday after the RBNZ came out sounding more dovish about the economy in its latest meeting, even though it kept rates unchanged as expected.
There is still a sense of caution among traders, however, regarding a spike in fresh infections across the US and some other countries after reopening of economies. This is holding the safe haven currency Japanese yen steady against the US dollar.
However, for now, analysts continue to maintain hope that governments will not reimpose lockdown restrictions again and hurt economic recovery which has just begun.
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