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May 17, 2021

U.S Dollar falls, over geopolitical concerns

US dollar

The Euro rose against the U.S. Dollar on Wednesday but the move was limited as concerns ahead of Washington’s end-of-week deadline to impose tariffs on Chinese imports kept many investors on the sidelines, the EURUSD traded at 1.16555 at the close of the session on Wednesday.

Moreover, the U.S. Dollar index fell by 0.27 percent at 94.54 against a basket of six major currencies.

Meanwhile, Investors are eyeing the publication which will be available on Thursday of the Federal Reserve’s June meeting, and the upcoming U.S. jobs data on Friday.

Furthermore, Major currencies largely traded within ranges, however, with Independence Day celebrations in the United States traders are discouraged from taking big positions, at least until its clearer where the escalating U.S.-China trade war is heading and to which extent by which Europe will become involved.

Over in the United Kingdom, The Pound edged up on Wednesday ahead of a survey on Britain’s dominant services sector which traders said could lift the struggling currency after decent numbers from the manufacturing sector emerged.

The Sterling has struggled in recent weeks as concerns about whether Britain can secure a deal with the European Union before it leaves the bloc next March weigh on the currency.

Furthermore, the Service Purchasing Managers’ Index (PMI) release which is published monthly by Markit Economics. The data collected were based on surveys of over 400 executives in private sector service companies which were 1.2 percent higher than the forecasted data at 55.1. The surveys cover transport and communication, financial intermediaries, business and personal services, in addition to, hotels and restaurants.

Regarding the safe havens, the USDJPY was trading at 110.463 lower by 0.14 percent at the close of the session on Wednesday.

While, the Commodity-linked Currencies, Australian, New Zealand and Canadian Dollar, advanced against their U.S. counterpart, supported by a rise in oil prices

The Canadian Dollar was stable against its U.S. counterpart on Wednesday, the USDCAD closed at 1.131 at the end of Wednesday’s session, while holding near its strongest level in three weeks, as oil prices rose and investors braced for a potential interest rate hike next week from the Bank of Canada.

The Australian Dollar, which is considered a liquid proxy for China-related risk, was down by 0.02 percent to trade at 0.7381 at the close of Wednesday’s session. Meanwhile, the Kiwi Dollar gained 0.2 percent to trade at 0.67587 NZDUSD at the close of the session on Wednesday.

Ali Hwary

Ali Hwary

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