The dollar at 2018’s lows, Euro above 1.1920
The dollar’s domestic purchasing power is expected to weaken faster with inflation. In which case, it is not easy to believe that the currency would maintain its purchasing power in the foreign exchange market in the long run.
For the second day in a row this week, the Euro has been trading higher against the dollar. The primary stimulating factor has been the dollar’s weakness. Besides this, the summer has ended, and correspondingly, capital is being rebalanced. This comes when the dollar is under pressure because of the latest decisions of the Fed, the central bank of the United States.
Also, investors are expecting greater volatility. They are confident that inflation in Europe, the interest rate decision of Australia’s Reserve Bank, and the US unemployment report will all support it.
The EUR/USD is trading at 1.1936, with a daily increase of 0.30%. The uptrend is expected to last until the end of the week, at least.
The coronavirus pandemic keeps spreading. According to the last reports from John Hopkins University, the number of confirmed cases has already surpassed 25 million. In terms of deaths, almost 847 thousand people have died from complications related to COVID-19.
The United States is the most affected country, with almost 6 million cases and more than 183 thousand deaths.
China’s non-manufacturing PMI rises in August
China published a non-manufacturing PMI of 55.2 in August, against the anticipated decline from 54.2 in July to 52.1.
The Chinese manufacturing purchasing managers’ index dropped slightly from 51.1 in July to 51.0 in August. Compared to the market’s expectations of a more significant drop, it looks like good news. Apparently, the index continues to increase.
Besides, Germany’s inflation has shown signs of concern. The inflation rate decreased by 0.1% year-on-year in August.
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