The dollar led gains on Tuesday, hitting a 4-week high in its Forex trading. Since the concerns of investors and traders turned away from the American currency.
It is not news to us how much the pandemic has affected the United States, and therefore its currency. In this way, the adverse trend of the dollar has remained present in the market.
And although an improvement is now being observed, the question that arises from this is: Could these dollar gains be sustainable?
The dollar hits highs, while the pound sterling falls
On the part of the United Kingdom and the British currency, the picture remains tense. Brexit is the stumbling block of the British economy.
And after the resignation of the head of Britain’s legal department on Monday, concerns once again loomed over the future of the pound.
Thus, at the time of writing, the pound sterling fell to a four-week low against the dollar and fell more than 1.4% to $ 1.2969.
Coupled with Brexit concerns, falling US equities caused Forex investors to flock to the dollar. Allowing this performance to rise in the US currency.
However, it is not all good news, as analysts at Capital Economics assert that dollar gains may be temporary. As they expect the world economy to continue to recover from the impact of the coronavirus.
Resulting in riskier stocks and currencies gaining more traction from higher interest rates. As could be the case with the Australian dollar, according to Reuters analysis.
Dollar price to date
At the time of writing, the dollar index is trading at 93.49 points, reaching a maximum of 4 weeks against a basket of currencies, as previously explained.
It is worth mentioning that some risk reduction movements are also being observed in the stock market, a situation that could be really positive for the dollar in the coming weeks.
Finally, negative aspirations persist, as analysts believe that there is still a long way to go before dollar gains can be sustainable in the long term.
Do you think the dollar will be able to maintain these gains? Leave your opinion in the comments.