US Dollar Rebounds from Seven-Week Low, Gold Fell 1%
The US dollar index recovered slightly from the lowest level in seven-week as hopes for the stimulus package before the election faded.
The greenback remained under pressure throughout the week after House Speaker Nancy Pelosi said she is extremely optimistic about the stimulus package by early next month as talks are going in the right direction with Democrats.
The greenback fell more than 0.8% against the basket of major currencies this week. Meanwhile, riskier currencies reported gains against the reserve currency.
Yen has recently hit the highest level in seventeen months against the US dollar. The USD price movement has been attached to stimulus talks over the past month.
“The market is getting a little tired of going back and forth on the stimulus talks,” said Joseph Trevisani, senior analyst at FXStreet.
“It doesn’t seem right now that either side is going to make enough concessions in view of the election, which makes sense actually, as far as their needs go, to get a deal done,” he added.
Investors have also digested reports related to the stronger than expected jobs data. The report shows that the number of Americans who applied for unemployment benefits fell to the lowest level since March.
The jobless claims came in at 787,000 last week. This is the first time jobless claims fell below the 800000 level.
The yellow metal, on the other hand, fell today after making gains early this week. Gold is currently trading around $1900 an ounce. The latest selloff is supported by a stronger than expected increase in job data.
The risker currencies grew sharply this week amid weaknesses in the US dollar. Euro traded in the range of $1.18 against the US dollar this week. The new economic and social restrictions from the European Union amid the sharp increase in virus infections negatively impacted the common currency.