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Daily market commentary: The dollar continues to lose ground



FOREX

The dollar continues to lose ground to other major currencies, during early Friday trading. The US dollar index declined by more than 1.3% this week, a sign of weakness that can be explained by two main factors:  The prevalence of a risk-on stance in the financial markets, fuelled by positive news arising from Europe and progress being made in the quest to produce a vaccine for COVID-19, that diminishes the safe haven allure that supported the greenback during some of the darker times of the pandemic.

The second factor, contrasting with other countries that appear to have managed the situation better, is the deteriorating health crisis in the US, forcing a reversal in some states that had reopened for business and casting doubts over the country’s ability to drive a speedy economic recovery.

USD index

Ricardo Evangelista – Senior Analyst, ActivTrades

daily market analysis

GOLD

US Treasury Secretary Steven Mnuchin’s comments yesterday about the need for a stable US dollar, has not led investors to change their view on yellow metal, and gold fever remains huge.

Bullion is getting closer to $1,900, while the only resistance left for gold is the historical peak of 2011, which is just 1% above the current price.

Technically the first support zone could be found at $1,880, while price is attacking the psychological level of $1,900. Investors are still buying every single dip and pulling up prices.

Carlo Alberto De Casa – Chief analyst, ActivTrades


Disclaimer: opinions are personal to the authors and do not reflect the opinions of LeapRate. This is not a trading advice.

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Daily market commentary: The dollar continues to lose ground

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