Spike in Coronavirus Cases, Weak Economic Data Keep US Dollar Bearish
Arslan Butt • 1 min read
The US dollar is on the decline in early trading on Thursday, following five consecutive sessions of bearishness, as concerns about the increase in coronavirus cases, hospitalizations and deaths offset recent optimism around vaccines. At the time of writing, the US dollar index DXY is trading around 92.44.
The US dollar is trading around a weekly low against its leading peers, losing around 0.2% of its value so far this week, due to the shift in market sentiment. Weak economic data releases from the US over the past few sessions have also exerted strong downward pressure on the reserve currency.
On the other hand, the safe haven currency Japanese yen has rebounded sharply from the loss it experienced when news of Pfizer’s vaccine broke out last week. So far, the JPY has regained nearly 75% of its value after last week’s decline against the US dollar.
The coronavirus pandemic has claimed over 250k lives across the US alone and sent its economy into a state of deep recession. Markets now anticipate more stimulus measures to be announced to compensate for the severe and ongoing economic damage the pandemic has caused in the US, keeping the US dollar under more pressure.