The USD is rising due to economic concerns and doubts about US stimulus

Last Updated on October 26, 2020

USD Index Outlook: 26th October 2020

The USD rose in the European market on Monday against a basket of most traded currencies, on the verge of achieving its second gain within the last three days, thanks to the activity of buying the US currency as the best alternative investment, due to the escalation of concerns about the global economy, following the rise in cases of Coronavirus infections to record levels in Europe and the United States, in addition to increasing doubts about the approval of a new American stimulus before the US presidential elections next week.

The dollar index rose more than 0.3% to the level of 93.07 points, and the opening level of trading today at 92.76 points, and recorded the lowest level at 92.74 points.

The index ended Friday’s trading, down by 0.2%, after achieving a 0.3% rise the previous day within the rebound operations from the lowest level in seven weeks at 92.47 points.

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In terms of last week’s transactions, the US dollar index lost more than one percent, in its third weekly loss in the last month, and the largest weekly loss since last July.

The USD is declining weekly

The worst weekly loss in three months returned to the strong investor sentiment, focusing on buying high-risk currencies, after an advance in political talks in the United States over the new economic aid package.

France reported a daily record high of new infections with the Coronavirus on Sunday, as cases exceeded the barrier of 50 thousand cases per day, and the Italian government ordered bars and restaurants to close early and closed public gyms, and Spain issued a nationwide curfew to stop the outbreak of the disease.

In the United States, the number of daily cases of Covid 19 virus jumped on Friday by more than 83,000 cases, surpassing the previous record high recorded in mid-July.

These developments reflect the acceleration of the spread of the second wave of the Coronavirus pandemic, which threatens to destroy any recovery that occurred in the global economy after the end of the first wave.

US House of Representatives Speaker Nancy Pelosi said on Sunday that she expects a response from the White House on Monday regarding the fiscal spending plan.

These statements come amid few tangible signs of progress in political talks over the weekend over the long-stalled stimulus package, and it seems that the deal will not see the light of day before the US presidential elections.

Professional Trader and Analyst, economist in Financial and Forex marketsince 2004.holds an MBA from the American University in Egypt. Mohammed works as an economic writer and technical & fundamental analyst for many international Forex and financial trading companies in both English and Arabic on a daily basis.
Mohammed Abdelkhalik

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