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US Dollar Weakens as Economic Recovery Concerns Increase

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.

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Arslan Butt
Index & Commodity Analyst
Arslan Butt serves as the Lead Commodities and Indices Analyst, bringing a wealth of expertise to the field. With an MBA in Behavioral Finance and active progress towards a Ph.D., Arslan possesses a deep understanding of market dynamics.His professional journey includes a significant role as a senior analyst at a leading brokerage firm, complementing his extensive experience as a market analyst and day trader. Adept in educating others, Arslan has a commendable track record as an instructor and public speaker.His incisive analyses, particularly within the realms of cryptocurrency and forex markets, are showcased across esteemed financial publications such as ForexCrunch, InsideBitcoins, and EconomyWatch, solidifying his reputation in the financial community.
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