The losses suffered by the US dollar after an unsatisfactory US jobs report last week were successfully offset by the strengthening of the US dollar today. This is due to concerns about global economic growth and indirectly increasing investment in safe havens.
The US dollar index, which measures the US dollar against six major currencies, traded 0.22% stronger at 92.235. The U.S. dollar recently last Friday slumped to 91.941% for the first time since Aug. 4 following a U.S. jobs report showing the world’s largest economy creating the fewest jobs in seven months.
While a weak jobs report may prompt the Fed to issue a ‘hawkish’ statement but analysts believe that weakening global growth after a surge earlier this year could hamper the matter and become a major focus.
Traders on the other hand are of the view that the main narrative in the next few weeks is about whether global growth can return to better performance or not. This is dependent on the development of delta variants.
The benchmark 10 -year US Treasury yield strengthened to a high of more than a week also pushing the strengthening of the US dollar.
On the other hand, the antipodean currency, the Aussie dollar capped its gains on Monday, as Victoria, the second-largest state in Australia saw an increase in Covid-19 cases.
The focus is now targeted on the Reserve Bank of Australia (RBA) on Tuesday which is expected to re -postpone the central bank’s plans to reduce bond purchases.
