US Dollar Index Steady Ahead of Central Bank Policy Meeting
US dollar looks steady above the 93 mark against the basket of major currencies as improving economic data helped the greenback to reverse some losses last week. The U.S. central bank’s two-day policy meeting is scheduled for September 15-16.
The policymakers will look at the interest rate and other economic factors for further economic stimulus packages.
The USD index is currently trading around 93.20 against the basket of six major currencies. The gains in the US dollar value was also supported by weaknesses in the euro value. The European Central Bank has also been showing concerns over the robust growth in the common currency.
Stronger euro is not good for the European economy. This is because it strongly impacts European exports and the tourism sector, which are the backbones of the Eurozone economy. ECB has left the interest rates unchanged and hinted that the economy will grow at a faster pace than expectations. However, the bank looks aggressive against the robust euro price rally in the past few months.
“The ECB has confirmed that there is no further need for additional help,” said Naeem Aslam, chief market analyst at AvaTrade, in a market update. “For traders, the ECB’s confidence in the Eurozone’s economy is a good thing and this is the reason that we have seen the EUR/USD moving higher.”
US dollar has also gained momentum against the British Pound in the last week. The weaknesses in the GBP value were prompted by traders concerns over the Brexit trade deal. The UK prime minister has said that they will leave Europe without any trade agreement if the European Union is not serious about the trade talks.
Meanwhile, the EU also came up with a stiff stance. They threatened to take legal action against the UK if the British government seeks to override the withdrawal agreement.