The dollar is trading in disparate ranges with the euro and the pound sterling, after a poor start to the week in the Forex market for the green currency. Investors are clearly testing the ground for the dollar.
Uncertainty with the dollar continues to spread. Well, these last three weeks have not been positive for the performance of the American currency in the Forex market.
And it seems that as the days go by, the currency gradually degenerates.
Dollar analysts continue to claim that this weak performance of the US currency will continue, and projections do not paint a positive picture.
Why does the dollar keep falling?
The forex market environment is based on predictive investments.
It is a perfect balance between the stability of the economy and the policies of the country where the coins are born. Well, investors must act intelligently, studying every possibility of profit that comes their way.
For this reason, at the beginning of the world crisis, the dollar had become the quintessential safe-haven currency for investors.
Since the other economies were being hit by economic recessions due to blockades by the pandemic, the dollar seemed to promise to be a strong bastion in the face of such a crisis.
However, when the other economies managed to recover a relatively stable rhythm. In addition, demonstrating a good command of the control and retention of the Coronavirus, the United States began to lag behind.
Well, it has been one of the few countries that has failed to retain COVID-19 infections. Much less has it managed correct policies that control the disease in the United States. Allowing the country to be surrounded by a haze of uncertainty for the vision of analysts and investors in the Forex market.
The increase in cases in the country has added weight to investor insecurity. Since in New York alone there are 400,000 confirmed cases, being the highest case count in a week.
Investor sentiment on the greenback
The US dollar abandoned initial gains on Tuesday with forex traders abruptly. This is due to diplomatic tensions between the United States and China and the growing cases of Coronavirus.
The resurgence of new Coronavirus infections has caused some areas to impose new restrictions on business activity. This injects some caution into the multi-month economic recovery.
Well, the initial bet for a quick economic recovery still stands. And investors welcomed this future economic stability.
ING analysts said that while nervousness supported the dollar, even more so after the promise of an economic reopening, progress in the European Union’s efforts to agree on a package of recovery funds this week would boost the euro.
However, there has been a slight increase in the value of the dollar. After the governor of California re-launched measures to contain the virus in his state. However, this does not promise a sure rise in the dollar.
Against a basket of currencies, the dollar index last dropped 0.1% to 96,452. Maintaining it firmly with a narrow range from the month of May. The euro recovered and rose 0.2% against the dollar to $ 1.1369 on Monday.
Quotation of the dollar and its disparate trend with the pound and the euro
At the time of writing, the dollar was trading at its EUR / USD 1.1406 pair. The euro rose another 0.2% towards Tuesday against the dollar. This pair has been rising earlier in the week, despite a drop in the stock markets as the dollar has come under pressure again.
In the case of the GPB / USD pair, the dollar was trading 1.2549. Thus, this pair failed to settle above the upper limit of the previous trading range at 1.2650 and declined at 1.2520, as the US dollar gained ground against a broad basket of coins after California re-launched some virus containment measures.
In summary, the disparate prices of the dollar against its peers are only a small sample of the uncertainty and doubt that the American currency has generated among investors in the Forex market. Analysts expect this rate of the dollar to stay that way.
Will the dollar be a safe haven again?