The US dollar has continued to perform well since the opening of the European market but the Euro and risk currencies continue to decline as the market still hopes a $ 1.9 trillion stimulus package by President Joe Biden will be approved by Congress in the near future.
Market sentiment began to change from aggressive to more cautious last week as European economic data showed that the ‘lockdown’ measure aimed at limiting the spread of the Covid-19 pandemic had an impact on business activity until the stock market was also affected.
On the other hand, the market turned to the US dollar due to sentiment driven by a $ 1.9 trillion plan by President Joe Biden and expectations that the central bank will continue to increase its money supply in the market.
Apart from that, it also limits investment in risky currencies due to the lack of progress in the distribution of the Covid-19 vaccine as well as the effect of 'lockdown' on the economy.
According to FX's chief strategist at CBIC Capital Markets, economic growth in the first quarter of this year is expected to decline and market expectations revolve around the announced stimulus package.
The Fed's meeting on Thursday is expected to signal that there will be no announcement to stop large-scale stimulus in the near future.
At the same time tensions are rising ahead of the Federal Reserve's decision on Thursday. The central bank is expected to keep interest rates unchanged and push for a reduction in its bond purchase scheme.
The US dollar index, which measures the greenback against major currencies, recorded a strengthening of 0.31% to the 90.493 exchange rate as of 11.15 p.m.
The pound once again showed a decline as the US dollar rose again, but remained trading below the 1.37000 price level. At the same time the Euro continued to depreciate by 0.41% to the exchange rate of 1.2119.
