The USD is stronger against most of the majors today as the market de-risks into the weekend after a strong week for risk assets. No reason for risk off mood, just a pause for breath and it may reverse during the sessions ahead.
The risk off tones helping the USD find bids. 90.00 is support for now. As long as the risk off tone remains expect DXY buying from that 90.00 level today. However, as there is no catalyst for the risk off tone remember that this can all turn around quickly. Medium term dip buyers will step into risk assets if they slip too far too fast.
Comments from Westpac senior currency analyst Sean Callow quoted in a Reuters piece in response to Powell speaking on Thursday (US time).
“Shorter-term, Powell just put a lid on the US dollar”
“The baseline case is still for a substantial acceleration in the global economy, which historically has proven to be positive for most currencies against the USD, but I think there is potential to at least have a debate over whether us USD will be quite as weak as people expect. “
Is the Indian Rupee set for a third straight year of fall against the USD or will it make a comeback in 2021?
Image source: PixaHive
2020 has been a highly volatile year for the major international currencies, as international trade and supply chain disruptions combined with mixed investor sentiment led to extensive fluctuations.
As an aftermath of the pandemic, the world’s reserve currency the U.S. dollar (USD), has declined steeply throughout the past year, making it the worst-performing currency among the G10 currencies.
This is reflected in the US Dollar Index’s 7.53% decline over the past year. The Indian Rupee (INR) did not fare any better, as it was the worst-performing currency in the Asian subcontinent over the past year.