US Dollar Strengthens as Home Sales Soar, Europe Reimposes Restrictions
Arslan Butt • 1 min read
The US dollar continues to trade strong into Wednesday, with encouraging economic data releases strengthening the currency even as fears of a second wave of coronavirus and more lockdowns in Europe and Britain keep its major rivals under pressure. At the time of writing, the US dollar index DXY is trading around 94.16.
The US dollar received a boost after home sales in the country rose to the highest levels seen in almost 14 years during August. However, cautionary comments from Chicago Fed President Charles Evans on the US economy needing more fiscal stimulus to help it recover tempered some of the gains.
While concerns about fresh lockdowns and restrictions across Europe are expected to keep the dollar supported in the near future, there is also a risk of considerable volatility on account of the upcoming presidential elections in the US. The recent strengthening of the Euro is likely to wane as the next round of restrictions could slow down the Eurozone’s economic recovery, sending investors back into the safety of the Greenback.
Meanwhile, the GBP also fell to around a two-month low after UK PM Boris Johnson announced new measures to contain the second wave of coronavirus infections spreading across the country. GBP/USD also remains bearish over uncertainties about the post-Brexit EU-UK trade deal.