King Dollar accelerates decline as bearing waves across the globe

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King Dollar accelerates decline as bearing waves across the globe

A resounding weakness of American currency has been rumbling across the globe, fanning the flames of a momentous rally that steps up prices of a swathe of assets ranging from tech stocks to gold to financials. As of Tuesday’s market closures, the US Dollar Index (DXY), measured against a basket of six major currencies on an average, had wrapped up 0.25 per cent higher to 93.68 after shrugging off as much as 0.74 per cent a day earlier, while the US Dollar Index has been down roughly 9 per cent from its March highs and well poised to clock its worst month since 2011, mostly casted away due to a number of worrisome factors such as a pandemic outbreak at large alongside a sharp rise in tension between United States and China.

Sustained Dollar sell-off floats a global-scale market rally

Apart from that, adding that the sharply weakening American Dollar’s central role in global economy would likely to step up a raft of assets across the globe as Governments were seeking to flood their respective economies with economic stimulus aimed at cushioning up their economy from the pandemic-propelled slump, a senior analyst at payment firm Caxton, Michael Brown said on Tuesday, “The weaker dollar is almost becoming a self-fulfilling prophecy, with gains for risk assets seeing the dollar weaken further, fuelling additional gains.

” On top of that, a Goldman Sachs report unveiled later on the day had reported that the benchmark Standard & Poor 500, a home to the jubilant corporate stocks accountable for roughly 45 per cent of entire trading activities in the Wall Street, had returned a median of 2.6 per cent historically whenever the American dollar witnessed sharp downward spiral adding that a 10 per cent devaluation of the US Dollar would heighten up earnings per share by 3 per cent this year.

American Dollar has been down by 3 per cent so far this year after a rising for straight two years, however, the greenback faltered 10 per cent in 2017 and led to a 49.3 per cent gain of S&P tech stocks, while EM stocks had surged 39.9 per cent.