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Greenback Struggles Over Competitors

Aug 18 2020, 08:18 PM (BDT) |

Challenges Persist for the Dollar

The US index continued its fall yesterday. It closed under 93 for a fourth consecutive day.

Increased doubts about the durability of America’s economic recovery assisted the decline.

In addition, House Speaker Nancy Pelosi called on lawmakers back in session. Democrats are concerned the Trump Administration is trying to undermine the USPS ahead of the November election.

Record GDP Slump Fails to Decelerate the Euro

The euro benefitted on a weaker greenback, closing 0.25% higher on Monday.

This came even though the GDP of the eurozone suffered a record fall of 12.1% in Q2. As a result, the EURUSD pair reached the 1.19 level.

UK Optimistic Over Brussel Talks

The pound closed 0.10% above the US dollar yesterday for the third successive day.

Downing Street declared its intention of a trade deal with the EU by next month. This buoyed investor sentiment towards the pound.

EU and UK Brexit negotiators will meet in Brussels today. The stumbling blocks include the EU’s access to UK fishing waters and how a deal would be enforced.

US-Sino Tensions Linger

The weak US dollar was also evident against the yen on Monday. The Japanese currency closed 0.57% lower and below the 106 handle.

Further US-Sino tensions flared after President Trump announced more restrictions on suppliers to Huawei. He has also stated that he wants to offer tax credits to entice US firms to move factories out of China.

The China A50 saw declines in the morning session as profit-taking led to the index falling 0.60%.

In addition, a delayed election in New Zealand meant that the kiwi didn’t see the same level of growth over the US dollar. NZDUSD closed only 0.18% higher.

Indices Keep Reaching for Brass Ring

The S&P500 increased by 0.3% on Monday. That was just a few points below its record closing high in February. However, investors are wary that the stalemate over a new stimulus package could restrict the index from closing any higher.

Shares of Microsoft and Tesla increased by almost 0.7% leading the Nasdaq to close higher by 1.1%.

Gold Looks for Redemption

Gold looked to regain recent losses at it closed 1.8% higher on Monday. The previous week’s sell-off was short-lived, shifting risk appetite again.

However, traders should remain cautious over gold’s rebound as news involving coronavirus vaccine trials could have a detrimental effect on the asset’s price.

Oil Awaits OPEC, API and EIA

WTI remained at elevated levels yesterday, closing in on $43. Investors are looking towards potential profit-taking with EIA and API reports coming along as the OPEC JMMC meeting was delayed.

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