Dollar Rises Amid Chaos Among Tech Stocks
The dollar rises at the beginning of the trading day this Wednesday. The strong sell in the US equity markets has led traders to abandon riskier currencies in favor of the world reserve currency.
At 9:00 AM (CET), the dollar index, which tracks this currency’s evolution against a basket of six other major currencies, rose 0.1% to 93.562. The index has risen 1% in the past week, rising from lows of more than two years recorded earlier this month.
Moh Siong Sim, Bank of Singapore currency analyst, stated that the sell-off of techs had caught the market by surprise. He is a bit nervous about further implications. This could force some positioning in other market areas, which is probably what we see now, he explains.
The pair EUR/GBP Rises Upwards
The pair EUR/USD fell by 0.1% to the level of 1.1768, retreating further away from the 1.20 level last week.
The ECB meeting on Thursday is looming, and investors are waiting for any comment on the euro, given that it still accumulates gains of 10%. The coronavirus containment measures began in March, even after the last dip of the currency.
Analysts believe it is too early for the ECB to lower the euro with its speech this week. They say they do not expect comments about a brutal appreciation of the euro. Rather, President Christine Lagarde could highlight that the central bank is closely following the euro while reiterating that the exchange rate is not seen as a target.
On the other hand, concerns around the Brexit trade talks have brought GBP to last July levels. The pair GBP/USD is down 0.4% to $1.2939, while the EUR/GBP up 0.3% to 0.9093.
The UK will establish its life plan outside the European Union on Wednesday. Publishing legislation that a government minister has acknowledged would violate international law in a specific and limited way.
There is a low chance that that this information be received favorably in European circles, increasing the likelihood of a disorderly ending to the post-Brexit transition period at the end of the year.
Analysts still believe there is a more than 50% chance of reaching a deal.
Get the latest economy news, trading news, and Forex news on Finance Brokerage. Check out our comprehensive trading education and list of best Forex brokers list here. Subscribe now and receive FREE updates on the market today!