The American Congress is expected this week, to debate on current economic stimulus due to expire at the end of this month. But with strong opposition from America’s major political parties over the amount of stimulus needed to savage America’s economy resulting the greenback losing all it gains recorded on Asia’s trading session.
The U.S dollar index that gauges the greenback against a basket of major currencies initially gained 0.23% to trade at 96.112 5.01 AM GMT, before losing 0.12% to trade at 95.778 10.03 AM GMT.
The continuous resurgence in of COVID-19 pandemic globally, particularly in emerged markets with recent news of a potential vaccine that has already gotten passed its first trial phase plus the gradual reopening of global economies as kept many currency traders on looking for clear signals thereby keeping the safe-haven currency under intense pressure.
Taking a bullish look at the U.S dollar, it’s highly anticipated that many currency traders preference for the U.S dollar as a safe haven asset will keep the U.S dollar index above critical support levels at around 95.50-95.75 taking note of global currency traders’ sentiment surrounding its global status of being the world’s safe-haven asset and store of value.
“There are technical indications that the U.S. dollar could strengthen and that might be why we are seeing traders in the gold market taking the lid off the price at the moment,” said Michael McCarthy, chief strategist at CMC Markets.
On the bias side of global investors, a high level of caution prevail on the U.S dollar as many investors flock into a riskier financial assets with much global stock’s valuations reaching record highs, coupled with the high turnout of stimulus anticipated by the U.S Federal Reserve will keep the dollar ranging around the 95.25 to 97.80 in the mid-term.