The dollar is trading in disparate ranges with the euro and the pound, after a poor start to the week in the greenback market. Clearly investors are testing the ground for the dollar.
Uncertainty with the dollar continues to spread. The last three weeks have not been positive for the US Dollar’s performance in the Forex market.
And it seems that as the days go by, the currency is slowly degenerating.
Dollar analysts continue to say that this weak performance of the U.S. currency will continue, and the projections do not paint a positive picture.
Dollar Starts the Week Off in a Bad Way
Why does the dollar keep going down?
The environment of the currency market is based on predictive investments.
It is a perfect balance between the stability of the economy and the policies of the country where the currencies are born. For investors must act intelligently, studying every possibility of profit that comes their way.
That is why, at the beginning of the global crisis, the dollar had become the quintessential safe-haven currency for investors.
As other economies were being hit by economic recessions due to the blockages caused by the pandemic, the dollar seemed to promise to be a strong bastion in the face of such a crisis.
However, when the other economies managed to recover a relatively stable pace. Moreover, they demonstrated good control and retention of the Coronavirus, the United States began to lag behind.
Indeed, it has been one of the few countries that has failed to retain VID-19 infections. Nor has it managed correct policies to control the disease in the United States. It has allowed the country to be surrounded by a fog of uncertainty for the vision of analysts and investors in the Forex market.
The increase of cases in the country has added weight to the uncertainty of investors. As there are 400,000 confirmed cases in New York alone, the highest case count in a week.
Investor Sentiment on the U.S. Dollar
The U.S. dollar abandoned its initial gains on Tuesday with Etoro currency traders abruptly. This is because of diplomatic tensions between the United States and China and the growing cases of Coronavirus.
The resurgence of new Coronavirus infections has caused some areas to impose new restrictions on business activity. This injects some caution into the economic recovery of several months.
The initial gamble on a rapid economic recovery is still in place. And investors are welcoming this future economic stability.
ING analysts said that while nervousness supported the dollar, especially after the promise of economic reopening, progress in the European Union’s efforts to agree on a recovery fund package this week would boost the euro.
However, a slight increase in the dollar’s value has been noted. After the governor of California re-launched measures to contain the virus in his state. However, this does not promise a safe haven for the dollar.
Against a basket of currencies, the Dollar Index dropped 0.1% for the last time to 96,452. This keeps it firmly in a narrow range since May. The EUR recovered and rose 0.2% against the Dollar to $1,1369 on Monday.