On Friday, the American Dollar Index (DXY) measured against a basket of six major currencies on an average fell to a nearly three-month low as a number of key fundamentals including an upbeat economic data from China alongside a rapidly accelerating vaccine hope had prodded market participants to bet heavily on riskier currencies.
On top of that, likelihoods of a smooth transition of power in the Capitol Hill added further bullish wind to investors’ optimisms, as the US President Donald Trump said on Thursday that he would quit the White House, if electoral college vote against him.
If truth is to be told, the American currency had shrugged off as much as 2 per cent thus far this month following a breakthrough triumph of US President-elect Joe Biden on November 3 US Presidential election, while a likely calmer approach on trade with American allies as well as Beijing from the Biden Administration had shored up global equity indices and led to a mass-scale sell-off wave for the US Dollar.
US Dollar falls to lowest level in three months as risk-appetite soars
Citing statistics, on Friday’s FX market wind down, the American Dollar fell as much as 0.24 per cent to $91.75 against a basket of six major currencies on an average, its lowest level since September 1, after hitting an 18-month low of $91.67, while the US Dollar fell 0.23 per cent against its Canadian peer.
Aside from that, while Aussie and Kiwi jumped 0.41 per cent and 0.21 per cent respectively against the greenback, the British Pound fell 0.45 per cent over frets of a no-deal Brexit and the bloc’s common currency euro surged 0.78 per cent against its British counterpart.
In tandem, euro gained 0.39 per cent to round off the day at $1.1952, barely responded to dovish remarks from the ECB chief economist Philip Lane. Meanwhile, cautioning of further holocaust ahead for the American currency in a medium- to longer-term outlook, North America head of FX Strategy at CIBC Capital Markets, Bipan Rai said on the day’s commodity market wind down, “It started with the impressive industrial profits data in China and that’s translating into what is a very patchy backdrop for liquidity in the North American time zone.
Over the longer term this is probably the right trend for the dollar. We think the dollar has further room to the downside. ”