At the beginning of a brand new trading week, the US dollar is holding steady, close to the highest level in two months, in anticipation of several important economic data releases this week even as the presidential elections remain in the spotlight. At the time of writing, the US dollar index DXY is trading around 94.48.
Over the previous week, the dollar had soared to a two month high against major currencies, recording the highest weekly gain seen since April, amid a risk-off mood in the markets over concerns about the ongoing coronavirus pandemic and its economic impact. However, on Friday, stock markets rebounded and dampened the greenback’s safe haven appeal, sending it slightly lower.
Meanwhile, the Euro is likely to trade weak in the coming sessions over rising fears about a second wave of coronavirus and resulting shutdowns. In addition, ECB policymakers have been discussing ways to bring down the recently appreciated common currency while Brexit uncertainties are also likely to keep the Euro under pressure.
Later this week, traders are likely to focus on the first presidential debate ahead of the elections in early November, to drive moves in the US dollar. On the economic news front, the reserve currency could be affected by the release of consumer confidence, manufacturing and jobs figures through the week.