The American currency gained grounds on Thursday, space-diving to a nearly four-month peak against a number of major and emerging market currencies, as investors’ optimism over riskier assets dampened followed by a renewed lockdown measure in major European economies including France and Netherlands, while a deluge of upbeat economic data in the United States suggesting that the world’s No 1 economy might be on the verge of a rebound, bolstered the greenback’s safe-haven bid.
Aside from a rise in pandemic cases in Europe with the narratives being grievously compounded after Novavax had delayed a pandemic vaccine shipment deal, the American currency received a boost from a steep plunge in crude oil futures’ prices that fell more than 4 per cent on Thursday, as salvage companies were quoted saying that the Taiwanese ship, which ran aground in Suez Canal on Tuesday and blocked the single-lane sea passage diagonally, might occlude the channel for weeks, triggering a stabbing backlash for a gradually recovering global economy.
US Dollar soars to four-month peak; equities flatlined
In factually, in what analysts were contemplating as a sign of further upswing of American currency, the greenback had broken off a technically pivotal 200-day moving average earlier in Asia-Pacific trading session on Thursday, while the US Dollar Index (DXY) measured against a basket of six major currency gained 0.30 per cent to 92.7 with the bloc’s common currency euro having daggered by 0.27 per cent to $1.17.
Meanwhile, as US Dollar spiked to its highest level since November, an investment director at Aberdeen Standard Investments, James Athey said, “If the dollar starts rallying, that becomes a problem. It means commodity weakness and emerging-market weakness and it starts to provide a disinflationary countervailing narrative.
” In tandem, having been hard-pressed by a stronger US Dollar alongside an unprecedented epidemic in Europe, MSCI’s gauge of global equity indices that keeps track of 49 stock exchanges across the world shed 0.05 per cent, anchoring near a two-week low.