The U.S dollar has kicked off this week with some bullish momentum, which is helping it to recover from last week’s losing streak, which saw its value go down significantly amid underwhelming news reports.
The greenback kicked off Monday’s trading session with significant upside helping it to win back some of the losses that it took from both riskier currencies and stronger currencies. The USD’s new found momentum this week has numerous causes. Still, the major one is the fact that investors have become more cautious as governments implement lockdown measures to combat the coronavirus spread. This means that investors have are shying off from investing in riskier currencies and are instead investing in the USD.
The week has kicked off on a more cautious outlook amid the risking number of coronavirus infections across the globe. Investors are thus worried that the uncertainty regarding the viral threat may lead to a prolonged negative impact on global economies. Thus the need put their money in safe havens until things cool down. Another major factor that might be fueling the greenback’s rally is the implementation of various government measures that are aimed at supporting the U.S economy.
Analysts are also convinced that investors are balancing out their portfolio now that it is the end of the month. This, plus the rising concern over the coronavirus, may contribute to the U.S dollar’s upside potential.
The U.S dollar’s rally against the Euro
The U.S dollar’s renewed bullish momentum was evident by its performance against the Euro for the better part of Monday’s trading session. The EUR/USD currency pair opened Monday’s trading session at 1.1138, which also happens to be the day’s high, courtesy of the pair’s bearish run. The currency pair’s lowest price point at the time of this press was 1.1010. The Greenback is expected to continue gaining as long as investors continue treating it as a safe haven currency. The Federal Reserve’s decision to facilitate unlimited liquidity amid the coronavirus threat may have also contributed to the USD’s bull run.