US Dollar dives to two-and-a-half year low on hopes of global economic recovery



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US Dollar dives to two-and-a-half year low on hopes of global economic recovery

In context of a cascade of clattering US economic data released earlier on Thursday, the American Dollar Index (DXY) measured against a basket of six major currencies jolted to its lowest level in more than two and a half years, while the bloc’s common currency euro held forth above a critical resistance level of $1.21, suggesting further downside momentum in the cards for a sharply softening American currency as an upbeat China factory data released earlier this week alongside potential developments in at least three pandemic vaccine candidates had lifted investors’ morale.

In point of fact, US Labour Department said earlier in the day that the number of Americans filing for weekly initial jobless claims dipped by 75,000, but had remained at a historically high over the week that ended on November 28, while other Govt.

data released on the day had revealed that the vast US service sector activities had faltered to a nearly six-month low, denting the US Dollar and encouraging bets on riskier assets further. Aside from that, risk-appetite had also received another boost following media headlines that the health regulators in UK had authorized Pfizer Inc.’s pandemic vaccine candidate for emergency use.

US Dollar dented as risk-appetite roars back

Citing statistics, in the day’s FX market round off, the US Dollar Index (DXY) measured against a basket of six major currencies on an average fell as much as 0.5 per cent to 90.57, marking up its lowest level since the April of 2018, while euro climbed to its 2-1/2-year peak against the greenback to $1.2172.

Apart from that, the Australian Dollar, widely contemplated as a proxy for market risks, had wrapped up the day 0.4 per cent higher to $0.7441 against its American counterpart, while New Zealand Dollar had reached a fresh 2-1/2-year high of $0.7096, wrapping up the day 0.5 per cent higher.

Elsewhere, the British Pound gained 0.6 per cent against its American peer to wind down the day at $1.3450, largely buoyed up by a weakening of US Dollar alongside a continuation of Brexit negotiations. Meanwhile, referring to the prospects of further transmutation in investors’ morale against the US Dollar, once deemed as a hypnotic safe-haven bid, a chief market strategist at Bannockburn Global Forex, Marc Chandler said, “The market is reading all news as dollar-negative.

Investors are looking past all this and they look a bit further and they see the vaccines and they see a world that can start normalizing.