After falling to its 2 year low, the dollar has a significant rebound in the Forex market. As the concerns of traders and investors have shifted from the dollar.
The news from the dollar has been negative for a long time, but, the negative performance of the dollar seems to be improving briefly.
Therefore, today’s chart focuses on this Forex market event, because with this rally, the USD may take a break.
However, traders and investors cannot appreciate this good news, because now their concerns are totally centered on Europe and the European Central Bank.
The Euro is close to $1.20, while the Dollar is bleeding
The Dollar Rises Again to its Lowest Levels
After the euro reached $1.20 earlier this week, concerns in the Forex market were soon raised. Analysts felt that the rise of the European currency had been too fast and too strong for the taste of the European Central Bank.
Fears have increased after a Financial Times report confirmed those concerns about the ECB.
„Overall, the comments suggest that an immediate policy response by the ECB to help weaken the euro seems unlikely, and for now will rely more on external factors to curb the strength of the euro,“ said Lee Hardman, currency analyst at MUFG.
According to Reuters reports, ECB policy makers warned that if the euro continues to appreciate it will affect the bloc’s economy. In addition, it will intensify pressure for more monetary stimulus, which the Eurozone cannot yet provide.
The dollar has rebounded 1.3%, after scoring a minimum of 28 months on Tuesday against a basket of currencies. However, although this is a relief for the dollar, analysts believe it is only momentary. They assume that this is not enough of a stimulus to keep the dollar’s performance up.
There are still too many factors occurring in the U.S. that directly affect the U.S. currency. Political tipping points and poor control of the spread of the pandemic.
The dollar closes August with a 2-year low
Dollar quotation to date
At the time of writing, the dollar is trading at $1.1837, as a clear response to traders‘ concerns with the European currency. The euro last fell 0.4% to $1.1812, after hitting a weekly low of 1.1789.
The dollar has a rally in the Forex market, due to the concerns of investors and traders about the euro.
The dollar has been on a rally in the Forex market, due to investors‘ and traders‘ worries about the euro. Source: Yahoo Finance
At the time of writing, the dollar index is quoted at $92.88 against a basket of currencies.
For the past fortnight, the dollar has been struggling to hold the Cryptosoft line after its two-year fall. In addition, traders and analysts will be watching the initial requests for unemployment in the United States.
Will the dollar really be able to maintain this performance?