US Dollar Soars, Gold Plunged Sharply
US Dollar regained some upside momentum on hopes of coronavirus vaccine and second federal stimulus package. The US dollar soars for the fourth straight day as investors are trying to capitalize on the recent selloff.
Although several state governors have shown concerns on Donald Trump’s executive orders over the federal aid, the state sectary has announced moving back to the negotiation table. The news has sparked investor’s sentiments and supported the UD dollar rally.
Gold price, on the other hand, fell sharply from the all-time high that it had hit early this week. The gold spot price is currently trading at around $1800 per ounce after falling more than 5% on Tuesday. Encouraging economic numbers and investor’s move towards equities helped to lower the price of the yellow metal.
Several other metals also reported the biggest daily loss since 2008. For instance, silver dropped more than 13% while platinum and palladium plunged at a single-digit rate.
“This feels like a mini-crash. We could not overcome the early morning headlines of a Russian potential vaccine, and there was just continued optimism flowing into stocks,” said Edward Moya, senior market analyst at broker OANDA.
Euro, on the other hand, slipped from multi years high against the US dollar. Despite the latest selloff, the euro looks firm as analysts say the European Union appears in a better economic position than the US after coronavirus spread.
The ZEW survey showed that European economic sentiment grew to 71.5 from 59.3 in the previous month, topping analysts’ consensus estimate for 58.0.
“We need to wait ’til September to see clear direction coming from euro/dollar,” Jane Foley, senior currency analyst at Rabobank.
British Pound has started struggling against the US dollar as traders are showing concerns over Brexit, massive unemployment levels, and the risk of inflation. The GBPUSD pair has recently hit multi months high. The Australian dollar also dropped slightly from a previous all-time high against the US dollar.