US Dollar Weakens as Economic Recovery Concerns Increase

US Dollar Weakens as Economic Recovery Concerns Increase

Posted Friday, August 21, 2020 by
Arslan Butt • 1 min read

The US dollar is trading bearish against other major currencies on Friday, weighed down by a worse than expected weekly jobless claims report and a decline in US Treasury yields. At the time of writing, the US dollar index DXY is trading around 92.65.

The recent safe haven appeal of the US dollar took a beating after people filling for unemployment claims in the US rose by higher than expected over the previous week. This data raised concerns about the pace of economic recovery in the US slowing down even as the number of coronavirus cases continue to rise.

The dollar came under additional pressure over worries about the Fed’s QE efforts causing an oversupply of the currency in circulation, and is likely to weigh on the greenback over the next few weeks. On the other hand, major peers like the Euro and the GBP continue to make gains against the US dollar over hopes for faster economic recovery in the respective regions.

Earlier this week, the dollar had weakened after the Fed’s most recent meeting minutes revealed a more dovish outlook among policymakers in the wake of the ongoing coronavirus crisis. Meanwhile, the absence of progress on the coronavirus relief bill also plagues the currency, exerting downward pressure on it.

Check out our free forex signals
Follow the top economic events on FX Leaders economic calendar
Trade better, discover more Forex Trading Strategies
Related Articles
0 0 votes
Article Rating
Notify of
Inline Feedbacks
View all comments