Forex World News : Dollar Down, but Near Seven-Week

Date : 2021 / 02 / 01

Dollar Down, but Near Seven-Week Highs After Euro Selloff

The dollar was down on Tuesday morning in Asia but was hovering near seven-week highs. The U.S. currency was a beneficiary of an overnight euro selloff after COVID-19 lockdowns in the continent led to decreased consumer spending.

The U.S. Dollar Index that tracks the greenback against a basket of other currencies edged down 0.15% to 90.890 by 11:36 PM ET (4:36 AM GMT).

The USD/JPY pair inched up 0.03% to 104.94.

The AUD/USD pair inched up 0.09% to 0.7625, with the riskier AUD rebounding from two days of losses. The Reserve Bank of Australia kept interest rates unchanged at 0.10%, as widely expected, as it handed down its January policy decision earlier in the day. The NZD/USD pair was up 0.27% to 0.7175.

“When people think about selling euros, invariably you get some buying of dollars, because the euro-dollar exchange rate is easily the most liquid in the world,” Capurso added.

Global sentiment remains cautious overall, with investors still digesting the previous week’s market volatility that was trigged by a retail treading frenzy in stocks such as GameStop Corp (NYSE:GME) Investors are also evaluating whether the almost 7% selloff in 2020 over expectations of a global pandemic recovery amid massive fiscal spending and continued ultra-easy monetary policy, will continue in 2021.

In the U.S., investor sentiment was boosted after a “very productive” two-hour meeting on Monday between U.S. President Joe Biden and a group of ten Republican senators to discuss a downsized COVID-19 stimulus package.

However, Biden maintained that the $618 billion package proposed by the group does not go far enough to solve the COVID-19 crisis and insisted on keeping the $1.9 trillion price tag that he proposed in January. Democrat lawmakers also filed the $1.9 trillion budget measure on Monday, a step towards bypassing Republicans to get the measure passed in Congress, ahead of the meeting.

Written by FTG, Author from Investing

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