Dollar drools as economic optimism slanders safe-haven allure

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Dollar drools as economic optimism slanders safe-haven allure

On Wednesday, the US Dollar Index (DXY) measured against a basket of six major currencies on an average tumbled to a one-week low, as market participants had reportedly banked on a more optimistic stance about a revival of global economic outlook, while a number of upbeat US Government data alongside a renewal of talks over Biden’s $1.75 trillion infrastructure bill had spurred up global equity indices, eventually taking a greater-than-anticipated toll on the greenback.

On top of that, as worries over potential fiscal impacts of Omicron variant on global economic growth had eased over recent past followed by soothing remarks from S. African physicians who were treating Omicron-infected patients alongside the US head of pandemic response Dr.

Anthony Fauci, appeals of riskier assets had perked up with safe-haven greenback tottering to a nearly one-week low against most major and emerging market currencies. Aside from a rumbling global equity market, an increase in crude oil prices that followed an improvement in demand outlook, had subdued the American currency further.

Besides, a US Conference Board survey had unfurled earlier in the day that its index for US Consumer Confidence soared to 115.8 last month, leading to analysts’ belief that a ballooning US economy would continue to grow further deeper into next year while dampening the greenback’s safe-haven allure further.

Apart from that, US Treasury Yields, which often mirror the American Dollar’s safe-haven bid, faltered on Wednesday with 10-year US Treasury bond notes tumbling to 1.48 per cent.

US Dollar falters on renewed economic optimism

Citing statistics, in the day’s FX market wind-down, the US Dollar Index (DXY) measured against a basket of six major currencies, fell to 96.11, the lowest level since December 17, while risk-sensitive loonies like of Australian Dollar jumped 0.86 per cent to $0.7212.

Apart from that, British pound rallied 0.63 per cent to $1.3351, while the bloc’s common currency euro advanced 0.33 per cent to $1.3332. Nonetheless, safe-haven Japanese Yen remained almost unchanged at 114.16 yen per Dollar, while Swiss Franc shed 0.47 per cent to $0.9192 against its American counterpart.