On Tuesday, the American Dollar had gained ground against most major and emerging market currencies with US Dollar Index (DXY) measured against a basket of six major currencies rising for a second straight session in a row, as geopolitical unrests in Central Asia alongside a slowdown in Chinese economy coupled with concerns over delta variant, turned traders’ desks into a mare’s nest around the globe.
Apart from that, impacts of an unprecedented decline in US retail sales last month had largely been eclipsed by a higher-than-anticipated rise in US manufacturing output with auto sector surging as much as 11.2 per cent.
Nevertheless, in context of a flurry of fundamentals harnessing potentials to stem mass-scale geopolitical uncertainties, overall tone of Tuesday’s global markets had been utterly cautious, which in effect had added to further impetus on the greenback’s safe-haven appeal.
Meanwhile, addressing to a monumental scale of uncertainty looming large over Central Asia’s geo-political landscape that could have far-reaching consequences alongside investors’ frets over a likely slowdown in global growth, a chief market strategist at Cambridge Global Payments in Toronto, Karl Schamotta said, “This morning’s retail sales report served to confirm that the U.S.
consumer - the world’s biggest and most dependable customer - is becoming more cautious. This, combined with evidence of a slowdown in the Chinese economy and ongoing political turmoil in Afghanistan, is driving investors to pay off dollar-funded borrowing positions and pull money out of high-risk markets”.
US Dollar gains as global markets remain cautious
Citing statistics, in the day’s FX market wind-down, the US Dollar Index (DXY) measured against six major currencies on an average gained 0.6 per cent to 93.11, while euro, the bloc’s common currency shared among 19 member states, tumbled over 0.6 per cent to $1.1709.
Besides, the Kiwis fell to their lowest level in three weeks after inclining a nationwide lockdown, falling as much as 1.7 per cent to $0.6904 against its American counterpart, while the Australian Dollar, a closely observed proxy to global risk sentiment, dived 1.2 per cent to a nine-month low of $0.7253.
On top of that, safe-haven Swiss Franc alongside Japanese Yen, each drooled 0.3 per cent to $0.9149 and 109.56 Yen per Dollar respectively against their American peers.