US Dollar index plunged below the 93 after generating gains in the past couple of days. The latest selloff is prompted by the trader’s concerns over Fed’s chairman speech at Jackson Hole conference. Besides the Fed, the US dollar received strong support from economic data.
The Bank of England governor will also speak at the conference. Last year, Bank of England Governor Mark Carney at the Fed’s annual Jackson Hole Economic Symposium said that the U.S. dollar’s status as a reserve currency is at risk.
Fed’s conference is vital for economic outlook as investors have been aggressively waiting for how long the Fed will keep interest rates at zero levels. The US debt now stands at $26.5 trillion.
The US durable goods orders jumped 11.2% last month following a growth of 7.6% in the previous month, according to the commerce department. The core durable goods also rose almost 2.4% in July compared to 3.6% growth in the past month. The US consumer price index and housing data also suggest strong economic recovery.
“The pandemic has sped up key structural trends and triggered substantial market swings,” strategists for the $7 trillion money manager BlackRock wrote this week. “The policy revolution was needed to cushion the devastating and deflationary impact of the virus shock. In the medium term, however, the blurring of monetary and fiscal policy could bring about upside inflation risks.”
The US dollar index is currently hovering around 92.94 level. The index has hit twenty-seven months low last week. The market investors are expecting some upside momentum for the US dollar index amid improving economic data.
Euro, on the other hand, continues to trade around the highest level in the last two years against the US dollar. The common currency has been receiving support from a better eurozone economic and coronavirus situation. Gold trades around $1950. The greenback weaknesses supported the yellow metal price in the past couple of months.