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On Friday, the evergreen buck consolidated its achievements. It’s generally anticipated to conclude the fourth consecutive week in positive territory amid soaring optimism about the prospects for the surge of the American currency in the nearer weeks.
The US dollar index, tracking the dynamics of the greenback against a group of six key counterparts, showed 92.55, which is 0.1% lower than the previous reading, further drifting away from the maximum of four and a half months of 93.42 recorded in Wednesday.
The evergreen buck is ready to conclude the fourth consecutive week in positive territory – it will be the longest series of weekly leaps since the fourth quarter of 2016. For the last month, the US currency has ascended by approximately 4%.
Analysts of Bank of America state that the main catalyst for the surge of the evergreen buck was the lack of improvement in the economic indicators of the eurozone, which made traders open a record number of short positions in the US currency, in particular, against the currencies of developing countries.
According to data on positioning in foreign exchange markets, hedge funds cut the volume of net short positions in the evergreen buck by $10 billion to approximately $18 billion for the week ended May 4.
Trades in the currency markets on Friday are generally calm, with most of the key currency pairs traded in quite narrow ranges.
The common currency managed to strengthen about 0.15% hitting $1.1934, having come down from this year’s minimum of $1,1823, hit on Wednesday.
The evergreen buck remained virtually intact against the Japanese yen, trading close to the 109.28 yen mark having soared to a three-month peak of 110.05 the previous week.
As for the Australian dollar, it got back to $0.7552 having dived on Wednesday to an 11-month minimum of $0.7413.
During the daily press briefing of Andres Manuel Lopez Obrador, it was announced that Mexico will receive 1.4 million doses of the vaccine by the end of January. Is that optimistic enough for the peso?
The US unemployment claims are announced on Thursday at 15:30 MT time.
The Canadian monthly GDP is announced on Wednesday at 15:30 MT time.
USD’s rally takes a pause, while riskier assets are modestly rising.
We are now past the middle of January, and this means that the largest US companies will report their earnings for the fourth quarter and many of them will provide the results of the entire 2020.
Poor US data, slow vaccine distribution, rising virus cases worsened the market sentiment and underpinned safe-haven currencies like the USD, and JPY.
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