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The dollar takes a breather at the start of the week


The start of the week seems to start off on the right foot as the dollar takes a breather in the Forex market, improving its previous performance. Will the dollar be able to keep up?

However, analysts have not completely changed their view of the American currency. The idea persists that his promotion has not yet come.

Although, despite the reluctance of traders and investors due to the behavior of the American currency, the dollar seems to have a good start to the week.

The dollar breathes after a busy month

The dollar rose Monday against a basket of currencies that were performing better than the greenback.

This occurs thanks to investors developing some short positions, recent after the weakest monthly performance of the American currency in a decade.

However, although the dollar takes a breather, there are more existing factors that guarantee a prompt fall.

Analysts explain that the clear weakness of the dollar is directly related to market expectations about the promised easing of US monetary policy.

In addition to this, the political tensions between the American country and the Asian giant have not subsided.

Also, the Coronavirus appears to have no control in the United States, and these factors have created uncertainty among investors and traders.

Lastly, the lack of agreement among the US legislators on a greater fiscal stimulus has been added as a factor.

Falling yields on US bonds have also been cited as an element for traders to consider.

The Japanese yen takes the lead as a haven currency

Although, on Friday, the dollar registered its biggest daily increase against the Japanese currency since March, stopping a rally in the yen that saw it gain 3% in July, investors and trader continue to trust the Japanese currency as a refuge. .

The Japanese Finance Minister, Taro AsoHe described the yen’s recent rise as “fast” on Friday.

Noting that while the Japanese economy remains stable, the prevailing concern is that a strong currency could do more harm to an export-led economy that is already in recession.

Dollar price to date

At the time of writing, the dollar index is at $ 93.51 on the Forex market, showing a slight decline. Well, on the morning of Monday, the dollar index rose 0.5% to 93.83. However, it is a clear sign of the improvement in the performance of the dollar.

The dollar takes a breather in the Forex market, after a bumpy month for the American currency. Source: Investing
The dollar takes a breather in the Forex market, after a bumpy month for the American currency. Source: Investing

The dollar index, which measures the American currency against a basket of leading currencies, registered a decrease of more than 4% in July, its biggest monthly fall since September 2010. Thus, the dollar breathes at the start of the morning session. Monday finally.

The question remains among traders and investors, and although expectations are placed on the US unemployment figures that will come out this Friday, can the dollar really recover?

The truth is that it is not yet time to rush, and relying on these momentary breaths is not advisable.

Yes, the dollar takes a breather on Monday’s session, but how long will this event last?

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