Dollar Steadies After Highest One-Day Fall Since May

3 years ago

The dollar finally steadies up after going on a five-day dip on Tuesday. The currency witnessed the highest one-day fall since May as the market is not showing concern about Delta. The trend even shows on risk-related currencies benefitting from increasing good prices.

As the US Food and Drug administration approved complete vaccine development to BioNTech and Pfizer, the sector showed an increased risk appetite. The development is expected to accelerate vaccinations within the US. The trend also came because of China’s acceleration in the technology sector.

The nation is facing concerns due to a sudden increase in infected individuals. However, the market is not paying any heed to the crisis. Analysts are even indicating low liquidity as a primary factor steering quick swings in risk-handling capacities.

Kit Juckes, Sociele Generale’s head of FX strategy, talked about the recent development. As per Kit, the market is in a risk-taking mood even during increasing concerns regarding the Delta variation.

Around 11:31 GMT, the US dollar index reached a flat 92.99. It resulted in a five-day low of 92.95, which was also the biggest one-day dip since May 2021. During the same time, the Euro also went down by 0.1% at 1.17385 dollars.

Currently, the market is focusing on the Jackson Hole taking place on Friday. The event will see several investors participate, barring US Federal Reserve Chair Jerome Powell. It will release hints on a possible timeline, including tapering of financial stimulus.

According to ING strategists, the uncertainty regarding the Delta’s spread and local authorities’ response has prepared short-termism in the FX markets. As per Jerome, investors might want to discuss the subject on Friday before moving forward towards another risk-buying session.