US Dollar Trades Below 93 Mark Despite Steep Equities Selloff
US dollar continues to trade below 93 levels despite the massive stock price selloff on concerns stemming from record growth in daily virus infections. US and European stock markets lodged the largest daily decline in the past few months on Monday and extended that downtrend in Tuesday trading.
The USD index, which tracks the US dollar against the basket of six currencies, trades around 92.90 level.
The concerns over the rising virus infection and slowing economic growth also impacted the value of the greenback. Moreover, stimulus talks and prospects of relief packages ahead of the election are looming on the US dollar value.
“The dollar is broadly stronger, but not massively,” with structural forces such as low real yields holding back further gains adding to the wait-and-see approach to the election, National Australia Bank senior FX strategist Rodrigo Catril said.
Lower uncertainty related to the US presidential election has also been among the factors that are putting pressure on the greenback.
The polls are clearly suggesting that democrats Joe Biden is likely to win the election by a wide margin. Meanwhile, investors believe Joe Biden win could result in big stimulus packages, which could provoke investors to focus on risker assets and move away from the safe-haven assets.
The price of gold soared above the $1900 level as a weaker greenback makes the yellow metal cheaper for the consumers.
Meanwhile, the virus-related uncertainty is likely to give some boost to the US dollar as several European countries have introduced new social distancing policies.
The euro continues to trade in the range of $1.18 against the US dollar. The pair is making range-bound movements due to the weakness in the US dollar. The common currency is receiving a lack of support from the Eurozone as the economy of 27 members union is likely to face uncertainty amid fresh restrictions on businesses.