The euro, the beleaguered Japanese yen, and even the British pound managed to gain some ground on Tuesday, giving the dollar a break in its steady ascent higher, but medium-term fundamentals remained in favor of the dollar.
The euro increased by 0.42% to $0.9647, sterling increased by over 1% to $1.0783, while the dollar declined by 0.33% to 144.25 yen.
These movements, however, pale in comparison to the multi-year lows that all three currencies are currently trading at.
The yen remained just off its 24-year low reached last week before Japanese authorities intervened to bolster the currency, and the euro was still close to its 20-year low struck the day before.
According to Paul Mackel, global head of FX research at HSBC, “everyone has this hope that the dollar is peaking and peaking and peaking, but it’s just been way too premature.”
The Fed is solidly hawkish, global growth is slowing down, and when you combine those factors with increased risk aversion, everything points to a strong dollar, if not a growing currency.
Tuesday saw the dollar index at 112.39, down 0.7% for the day.
The decrease in the safe haven was mostly in line with a rebound in market sentiment toward riskier assets, which also helped European stocks and US share futures.
Mahnur is MS(development Studies)Student at NUST University, completed BS Hons in Eng Literature. Content Writer, Policy analyst, Climate Change specialist, Teacher, HR Recruiter.
