July 22, 2021

USD Depreciates! Has Market Sentiment Recovered?

 Risk sentiment eased slightly, with the US dollar easing its gains after hitting highs since early April and driving moderate gains in major currencies.

10-year U.S. treasury bond yields also jumped sharply to return to 1.3%, marking a decline in demand for safe-havens.

The dollar index, which measures the strength of the greenback against a basket of major currencies, traded at 92.82 after declining from a three -and -a -half -month high of 93.19 it reached on Wednesday.

Even so, the king of the currency remains strongly traded against major rivals which are still hovering at lows.

The main focus of the market today is on the policy meeting of the European Central Bank (ECB), during which it is expected to keep its monetary policy unchanged and introduce the implementation of a new central bank strategy.

The euro traded around 1.1780 against the greenback, rising from a three -and -a -half -month low recorded in the previous session.

Meanwhile, the pound also bounced back from a five -and -a -half -month low it reached on Tuesday, with concerns over the continued rise in coronavirus cases continuing to weigh on sentiment against the currency.

The Asian currency, the Aussie dollar traded steady after falling to an eight -month low on Wednesday after half of Australia’s population is now under coronavirus sanctions.

The Canadian dollar rebounded after world crude oil prices showed a recovery following the fall recorded earlier in the week, bringing it to trade higher against the USD.