August 19, 2021

After Rocketing High, What Will Be The Fate Of The USD In The European Session?

 Entering the European session, the king of currencies continued to maintain its strengthening momentum at a four -and -a -half -month high against major currencies, despite displaying a slight decline.

This strengthening was supported by a report of the minutes of the FOMC meeting which showed most Federal Reserve (Fed) policymakers agreed to make a reduction in bond purchases this year.

After getting clues from the minutes of the Fed meeting, investors ’focus now shifts to Fed Chairman Jerome Powell’s speech at the annual event of the Jackson Hole symposium later this month.

In addition, risky market sentiment also supported greenback dollar trading as a safe-haven as most major currencies continued to weaken.

The euro fell to its latest low since November 2020, bringing the currency trading around 1.16800 against the US dollar.

While the pound also depreciated, approaching a one -month low after being hit by inflation readings that missed expectations, besides also worrying about the daily case figures in the UK which returned to show an increase.

On the other hand, the rising Covid-19 threat also weighed on the Aussie dollar to continue to record decline, despite having been shown by positive readings of Australian employment data showing the unemployment rate declining in July.

Moreover, the Canadian dollar also depreciated lower despite Canadian inflation data showing an increase last month. The weakness of the loonie dollar stemmed from the fall in world crude oil prices to their lowest level since May.