US Dollar Down Again Despite Seven Straight Weekly Losses
The US dollar fell back again in Monday trading after generating some gains on Friday on the back of stronger than expected jobs data.
The dollar has experienced the longest losing streak in a decade as its value fell for the seven straight sessions in a row against the basket of major currencies. The dollar has been struggling to generate sustainable rally amid investors’ concerns over the US economic outlook and rising fiscal debt.
The US dollar index is currently trading around 93.339, slightly above a two-year trough that it had hit last week.
“Our portfolio has been positioned for a number of weeks now for a narrowly weaker USD as a consequence of the independent surge in COVID-19 infections in the U.S. that has opened up a decent gap in near-term economic performance, especially against Europe,” said analysts at JPMorgan in a note.
Euro has been showing strong resistance against economic uncertainty. EURUSD pair continues to trade at a multi-year high.
The declining coronavirus cases in Europe, the second stimulus package from the European Union, and better economic sentiments compared to the US have provided support to EURUSD pair in the past couple of weeks.
“As expected, the euro continued its upward trend. Contrary to the situation in the US, it seems that European authorities have managed to contain the spread of the coronavirus. The number of new daily cases of infection in the four most populous euro area countries (Germany, France, Italy, and Spain) in this respect, June was at its best by about 90%,” noted Ebury analysts.
The weaknesses in the US Dollar has also supported GBPUSD pair despite concerns over Brexit and massive economic contraction during the second quarter. British Pound has recently hit multi months high against the US dollar.