US Dollar is one of the main currencies in a world trading market. This currency is mostly used as a reference and comparison to other main currencies. That is why; it is always interesting to follow the news and condition of this US Dollar.
In the last few days, it was claimed that the US Dollar had decreased and was not performing well. It has happened for many reasons. The examples are about the political conflicts in America, the ongoing Covid-19 pandemic, and so on.
What about the current state of the US Dollar? The condition of this currency is dynamic. However, overall it shows that the US Dollar is not in its best performance. You must be more careful then. Here is the complete information.
The Defensive Stage of USD
The US dollar was on the defensive stage against most currencies on Friday. It happened after a rise in US jobless claims and a decline in Treasury yields dampened the appeal of holding back the greenback. It may be quite reasonable.
The euro, which has been the biggest beneficiary of the dollar's recent decline, will be in focus on Friday as market participants brace for eurozone manufacturing data. The bigger-than-expected rise in weekly US jobless claims came just one day after Fed officials warn.
They warned that the recovery in hiring was starting to slow. It is raising doubts about how quickly the world's largest economy will bounce back from the coronavirus. Some concerns about the US economy combined with the oversupply of dollars are the reason.
It’s already circulating due to massive quantitative easing of the Fed, are likely to weigh on the US currency in the coming weeks. This condition is in line with what the analysts said. The sentiment for the dollar is weak at the present time.
What the Analyst Said
The weak sentiment of the US Dollar is reflecting all the true QE and decline in US yields. It was like what Tsutomu Soma at Monex Securities stated. Besides, the euro condition is strong because Europe has put in place a strong halt to support economic growth.
This strategy has increased confidence in the euro and also the eurozone bonds. The dollar stood at $ 1.1866/euro on Friday in Asia. It is following a 0.2% drop in the previous session. The British pound bought $ 1.3218, holding off the 0.8% gain made on Thursday.
The dollar also held off losses against the safe-haven Swiss franc. The last trading was at 0.9071 in Asia on Friday. The greenback was noted at 105.73 yen after a 0.3% drop happened on Thursday. Those data can be used as your guidance.
The numbers of people in America filing new claims for unemployment benefits were increased. It was unexpectedly climbed back above the 1 million marks last week. These data showed Thursday in a pullback for a US job market that has been crippled by the coronavirus pandemic.
Why Sentiment for the Dollar Happened
The dollar index against the six currencies fell 0.3% on Thursday. Sentiment for the dollar happened after the dovish minutes of the Fed's latest meeting. It was released on Wednesday. Currency moves could be restrained during Asian trade for any reason.
Those are due to a lack of major economic data. It concerns about friction between the United States and China. Market participants in the euro area looking forward to the manufacturing data release. It is for the eurozone and Germany.
The growing consensus stated that the euro will continue to strengthen. It is reasonable since the European governments have taken strict action on stimulus to support the growth. By comparison, Republicans and US Democrats are still at odds over additional economic stimulus.
