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The US dollar has set. Will the currency continue to fall?

The US dollar stabilized on Monday after a recent fall. Market sentiment has become negative due to new concerns about Covid-19 and the global economy. As expected, traders stick to safe currencies.

However, analysts believe the dollar could resume its downtrend if the Federal Reserve Board reaffirms its decision on highly accommodative monetary policy. The agency’s interest rate conference will take place later this week, and investors are widely looking forward to the results.

Kazushige KaidaAt this time, the Fed is unlikely to have the incentive to reduce its stimulus, said FX Sales Manager at State Street Bank’s Tokyo branch. However, some traders may try to read between the lines to find signs of stimulus tapering. He added that the dollar has remained on a downtrend, even though it has been stable so far.

Analysts hope that Federal Reserve Chairman Jerome Powell has no plans to rewind the authorities’ massive stimulus shortly after the central bank completes its policy review on Wednesday. There is.

Meanwhile, the dollar index was flat, trading at 90.172. It plunged to 90.043 on Thursday and then rebounded on Friday. This is the lowest level last week.

How was the European currency?

In the euro area, economic activity in January shrank significantly as a strict blockade to contain the coronavirus pandemic hit the block’s dominant service industry. UK retailers also struggled to recover in December, according to UK data.

On Friday, British Prime Minister Boris Johnson said there was evidence that a new version of the coronavirus discovered late last year could be associated with higher mortality. In addition, problems with the deployment of some vaccines had a negative impact on emotions.

There was some bright data from the United States, but the bright news of the coronavirus obscured it. According to the latest report, manufacturing has surged and existing home sales in the United States have surged unexpectedly.

Analysts have pointed out that bets on the dollar are overcrowded. US data on Friday show a surge to the largest net dollar short position since 2011.

Meanwhile, the euro paused after rising 0.8% last week and changed slightly at $ 1.2174. Signs of political instability in Rome pushed up Italian bond yields and hindered the growth of the common currency. Yield spreads between German Italians and bonds soared to their highest level since November on Friday.

The pound sterling was strong at $ 1.3684, staying close to $ 1.3745, the two-and-a-half-year high that the currency touched on Thursday.Sterling rebounded primarily by British leads Coronavirus vaccination.

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The US dollar has set. Will the currency continue to fall? The US dollar has set. Will the currency continue to fall?

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