August 25, 2021

USD Not Strong Enough To Rise Higher?

 The start of the European session saw limited currency movement as investors await the Federal Reserve’s (Fed) annual economic symposium in Jackson Hole this Friday.

After recording gains in the Asian session, demand for the US dollar monarch returned to decline as it entered the European session reflecting market vigilance in positioning.

The dollar index returned to a one -week low, trading at 92.88 against a basket of major currencies.

Meanwhile, the U.S. House of Representatives today passed a $ 3.5 trillion spending bill backed by Democrats.

The focus now shifts to the Senate for approval.

The pound rose slightly by trading around the 1.3740 price level following the depreciation of the greenback dollar, amid the absence of a major catalyst from economic data from the UK.

Meanwhile, euro currency investors seem to be ignoring the latest data released on the European session, which showed the German business climate index of the Ifo survey declining lower than expected.

Following the publication of the data, Ifo analysts said 70% of industrial businesses complained about supply chain disruptions, where it caused the trade index to also fall and traders to be less satisfied with their business now.

Commodity currencies, on the other hand, traded stable and maintained gains on Tuesday. Improved optimism about interest rate hikes by New Zealand’s central bank continues to support kiwi dollar trading.