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The dollar has seen a dramatic comeback in the past week, with the dollar index rising to its highest point since Nov. 30, 2017.
The dollar index is a measure of the strength of the US dollar. It is calculated by averaging the US Dollar Index, which is an average of many foreign currencies. This week, the index was up 0.3% in response to changing moods in global markets.
- Rising Bond Yields Aid USD Rebound
- With jobs data due, the Euro Pound will take a breather.
- On Wall Street, the busy earnings season continues.
As risk aversion returns among traders, the USD currency market has risen marginally. The rebound in the US 10-Year Treasury yield, as it swings back to a more stable level, has coincided with this shift in attitude. Both events have resulted in Dollar purchasing, which has had the opposite effect on the Euro and the Pound. Meanwhile, on Wall Street, the hectic earnings season continues, with the Dow Jones Industrial Average aiming to surpass yesterday’s high.
The dollar’s return to form is supported by Treasury yields.
A more optimistic market attitude has enticed traders away from the traditional safe haven, driving the dollar down in the past week. This was followed by a drop in the yield on the 10-year Treasury note in particular. This identical yield figure is currently on the rise, assisting in the support of a day of increasing demand for the US dollar. The market tone has sunk a little, and those forex traders who trade the greenback seem to be beginning to pull back.
A variety of reasons seem to be driving this trend. The return of the yield to a stronger position, as well as increased Chinese anxiety about the Evergrande issue, are among them. After being suspended for the last two weeks, the stock fell by double digits when it reopened today. Many people are concerned that if the business fails to find a solution, it would have a cascading effect.
Withdraw from the Euro and the Pound
At the same time that the Dollar began to rise again, the Pound began to decline, and it currently trades around 1.38. Many in the UK anticipate the Bank of England to raise interest rates shortly, but the probability of this has decreased somewhat as the UK’s inflation data has improved. Then there’s the matter of COVID and Brexit to deal with.
After a brief sell-off earlier in the day, the Euro is stabilizing. For the time being, it is hovering around 1.165, while crucial data from the United States is anticipated. This includes weekly initial jobless claims and existing house sales data, both of which have the potential to influence the currency market.
Wall Street is hoping to build on its recent gains.
Yesterday, the Dow Jones reached a new all-time high, gaining more than 150 points in what has so far been a good results season. Today’s early pre-market trade was calm, with futures falling marginally, but the mood on Wall Street remained upbeat.
In the United States, the FDA has continued to take measures to ensure that a growing percentage of the population is completely vaccinated. As the nation continues to recover, they have allowed J&J and Moderna vaccine booster injections, as well as the mixing and matching of booster shots that vary from the initial vaccine brand.
The hfx trading meaning is a market that has been struggling for some time. Recently, the dollar has seen a bounce back and the mood of the market seems to be changing.
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