American dollar spikes to 29-month peak, as slowdown jitter hobbles

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American dollar spikes to 29-month peak, as slowdown jitter hobbles

On Tuesday, the 1st of October 2019, the American dollar index (DXY), which traditionally bolsters during geo-political chaos, had spiked to its 29-month peak against a basket of six major currencies on an average, sinking the euro down to its weakest level since May 2017.

In point of fact, the seemingly over-valued US dollar, which had been strengthening its foothold amid a relatively higher interest rate alongside a strong labour market, gained 0.27 per cent to wrap up day at 99.39, its highest level since May 15th, 2017.

Meanwhile, according to Commerzbank, the US dollar index (DXY) would likely to outperform further against a raft of rival currencies, as investors had been hanging on to US dollar and safe-haven assets such as gold as a flight-to-safety response.

Aside from a flight-to-safety response of the investors’ all over the world following a series of bleak economic data, United States’ ongoing trade war with China alongside a tempestuous outlook on US stock exchanges that had been keeping large buyers at bay, had catalysed Tuesday’s (October 1st) rally of US dollar.

If truth is to be told, investors’ bet on a weaker US dollar following another rate-cut appeared to be highly unlikely, as big-league economies of the euro zone including Germany had been falling short of GDP growth target, while a garrulous Brexit had kept the British currency under pressure against an over-valued US dollar.