At press time the U.S. Dollar Index used in gauging the greenback’s strength against a basket of major currencies ticked up by 0.20% to trade at 90.118 index points.
Although the recent weaker-than-expected non-farm payroll data would ease hawkish pressures on the U.S Federal Reserve at least in the near term, global investors are becoming shaky on news that the U.S Apex bank will start discussing tapering asset purchases given the high levels of inflation.
Recent comments from U.S. Treasury Secretary Janet Yellen that higher interest rates, and higher inflation levels, would be good for the $22.7 trillion economy, reinforced buying pressure on the U.S dollar momentarily.
In the past few days, currency traders are taking cues from the US stimulus updates and broader market sentiments, partly responsible for the significant amount of selling pressures sighted in leading commodities, that include Crude oil, precious metals.
Also, at the Crypto market, Ethereum and Bitcoin were down more than 8%, as institutional investors reduced their holdings in risky assets.
Currency traders in the coming days await the report on the consumer price index due in some days’ time, to track the U.S apex bank’s next move ahead of its all-important meeting scheduled to hold in the following week.
The U.S Federal Reserve Bank is expected to reveal its plans on tapering assets later this year with the actual process to start by Q1, 2022.
However, Current price patterns reveal currency traders’ activity remains subdued after Friday’s lacklustre U.S Job report, posting evidence that many businesses in the world largest economy are struggling to find enough workers as the economy rapidly recovers from COVID-19.
Dollar bulls in the mid-term face an uphill battle after recent economic data show the world’s largest economy is still missing more than 7 million jobs lost due to COVID-19, yet business executives complain they can’t find workers.