US Dollar Moves Lower Amid Improved Market Mood

2 min read
22 Jul, 21
Written by Clover4X
Article Highlights:
  • Broad US dollar weakness pushes other major currencies higher
  • Brightening economic prospects pressure the safe-haven dollar

US Dollar Moves Lower

The US dollar, which traditionally acts as a safe haven during times of heightened uncertainty, has moved lower across the currency board. Over the past couple of days, the greenback has retreated from its highs against a basket of currencies, including the euro, the Swiss franc, the Canadian dollar, and the British pound.

An upbeat sentiment has spread over the currency market. Investors are now largely confident that the Delta strain of the coronavirus will most likely not derail the ongoing global economic expansion.

The single European currency on Wednesday gained more than 0.40% against the weaker dollar. The EUR/USD climbed from a session low of 1.1750 to a daily close of 1.1793. The pair snapped a four-day losing streak.

The EUR/USD, however, remains pressured in the medium term as the exchange rate has been in a downtrend for the past couple of months. Starting near the end of May, the euro accelerated its downward momentum against the dollar and has depreciated by roughly 4% to the current market price of around 1.1795.

Today, the European Central Bank is expected to present its forward guidance and latest decision on its monetary policy. The event could bring increased volatility in the bloc’s currency.

Major Currencies Climb

The USD/CHF on Wednesday erased all gains accumulated a day earlier. The pair dropped as much as 55 pips, or 0.60%, to a closing level of 0.9178. The Swiss franc has been trading in a range against the dollar, hovering between 0.9250 and 0.9150 for the past five weeks.

The USD/CAD yesterday logged its second straight day of losses. In the span of two days, the American currency declined about 2% against the Loonie. The exchange rate is now gravitating toward the neighborhood of 1.2560, right below the 200-day moving average. The USD/CAD, in the medium term, has been in a strong upside swing, having added over 4% to its value since June 1.

The GBP/USD on Wednesday ended a sharp four-day decline that had erased nearly 2.40% of the pair’s worth. In a sharp comeback rally, the sterling advanced nearly 1% to a closing level of $1.3720.

Meanwhile, gold is trading slightly lower as the price of the precious metal has been moving to the downside over the last three days. Gold’s price is now gravitating toward $1,796 per troy ounce.

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