Today’s auction reflected a decline in the quotes of the greenback. Its price is falling relative to a larger number of major world currencies.
The main attention of market participants focused on the conflict between Washington and Beijing, which is only gaining momentum and, apparently, will determine the movement of the quotes in different markets in the near future. Recall that the decision of China to pass a bill protecting the interests of the national security of Hong Kong caused a storm of emotions on the American side. Today, the American president is due to announce a new portion of sanctions designed to influence the Chinese government. Most analysts are confident that the answer will be tough due to the introduction of duties on part of the goods from China, which had previously been canceled during the bilateral agreement.
The ICE index, which reflects the dynamics of the US dollar against a basket of six major world currencies, which include the euro, yen, Canadian dollar, pound sterling, Swiss franc, and Swedish krona, today showed a 0.2% drop, which made traders think.
In general, the current week was not very successful for the greenback. Losses were recorded in relation to almost all significant currencies. The reasons for this should be sought in the gradual, however slow, but systematic removal of quarantine measures for the coronavirus pandemic. More pressure was exacerbated by the soft economic policies of European countries that are ready to begin implementing a new plan to stimulate the European economy. Thus, the demand for “safe havens” is falling, and investors are becoming more at risk.
This morning, the single European currency against the dollar strengthened by 0.19%. The euro was at around 1.1098 dollars, while during yesterday’s trading it stopped at 1.1077 dollars. The struggle of the euro against the dollar continues amid news of the creation of a special fund, where money tranches will be sent to support the economies of European countries that have been seriously affected by the pandemic. And sadly enough, there are still new numbers of positive cases up to this day, however, the outgoing statistics somehow gives encouraging results. For example, the decline in retail sales in Germany slowed down in the second spring month. Compared with the previous indicator, there was a decrease of another 5.3%. Making the drop in retail sales at 6.5%, which is much lower than the previously estimated 14.3%.
US domestic economic indicators also cannot be called stable. As it became known, in the first quarter of this year, the US economy contracted by 5% per annum, although preliminary expert estimates did not reflect a fall in GDP of more than 4.8%.
The price of the US dollar against the Japanese yen fell by 0.38% and reached the level of 107.24 yen per dollar. Recall that yesterday trading closed at 107.65 yen per dollar. The yen today has demonstrated its strength and rose against almost all significant currencies. Investors began to leave “in defense” in anticipation of Trumps’ speech as confidence is lost, and you want to keep your own assets.
In relation to the pound, the US dollar has already lost 0.27% today and is at the level of 1.2350 dollars per pound. Thus, the pound continues to move up amid an increasing trend towards the sale of the US national currency. Nevertheless, the British counterpart also could not do without the pressure that came from speculation about the possible introduction of negative interest rates, as well as the lack of movement in negotiations with the European Union about conducting trade.
Australia’s national currency grew by about 0.17% against the dollar and was at the level of 0.6656 in Australian dollar. This rise of the Aussie was the highest in the last few months.
The New Zealand dollar, which also became stronger against the American, followed his lead. He took the mark of 0.6214 dollars for the Qiwi, which brought him closer to the maximum level recorded in the first month of spring.
In Australia and New Zealand, a steady recovery in business activity is observed, which indicates the growth of economies and becomes a negative factor for the US dollar.
The greenback is also declining in relation to the Swiss franc. The fall already amounted to 0.9%, which forced the greenback to take the line at 0.9627 per franc.
The dollar was stable in relation to the Chinese yuan. It remained virtually unchanged at 7.1463 yuan per dollar.