US Dollar Gains as Markets Turn Cautious About Pandemic’s Economic Impact
The US dollar is trading somewhat bullish as a new trading week begins, despite a cautious mood among investors on the back of weak economic
The US dollar is trading somewhat bullish as a new trading week begins, despite a cautious mood among investors on the back of weak economic data releases from the US and the continued rise in fresh coronavirus infections. At the time of writing, the US dollar index DXY is trading around 90.81.
The safe haven appeal of the US dollar has been strengthened as markets worry about the economic damage caused due to the pandemic. In early trading on Monday, China’s lockdowns to contain the fresh outbreaks of coronavirus lent further support to the greenback, even as it posted a better than expected GDP for Q4 2020.
The dollar has also gained in recent sessions following the Democrat victory in the Georgia election, which gives them a majority in the Senate. Markets are hopeful that this would help president elect Joe Biden unleash more stimulus measures which could aid in economic recovery in the US.
The cautious mood in markets has sent the Euro more than 2% weaker against the US dollar while the GBP trades close to a one- week low. Meanwhile, commodity currency NZD is trading at the weakest level seen in three weeks, after slipping 0.1% lower against the reserve currency.
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