The dollar was fired up at the last trading session of the week crushing its major currency rivals, Bitcoin, Gold, and leading global Stocks.
The U.S dollar retained its safe-haven status on the account of the U.S Dollar Index settled remarkably higher than a basket of six other global major currencies.
The U.S dollar index gained 0.6% on the day to settle at 90.77.
What this means
Investors are piling to the U.S dollar after receiving worrying U.S economic data. Retail sales in the world’s largest economy were off 0.7% last month, the third straight drop.
- Such upsides seen in the greenback’s value saw gold at the expense of a charging dollar whose strength astonished metal traders, saw gold futures losing as much as 1.16% to settle at 1,829.90/ounce
- Also at press time the flagship crypto asset, Bitcoin traded at $35,756.99 with a daily trading volume of $70 Billion.
- Bitcoin is down 7.38% for the day.
Also, the world’s biggest stock market by market volume and liquidity suffered heavy losses, as data showed the Dow Jones Industrial Average plunged by 0.57% to settle at 30,814.26 index points, the S&P 500 lost about 0.72% to settle at 3,768.25 and the Nasdaq Composite fell by 0.87% to close at 12,998.50 index points.
The greenback was an outlier at the last trading session despite drops seen in U.S bond yields associated with the benchmark 10-year U.S. note, whose resurgence in the previous week had been the catalyst for the U.S dollar comeback.
What they are saying
Milan Cutkovic, Market Analyst at Axi, in an explanatory note to Nairametrics, spoke on fundamentals supporting the rebound of the U.S dollar;
- “Many investors continue to stand on the side lines. President-elect Joe Biden unveiled his US$1.9 trillion stimulus plan. There were no major surprises, and a lot of it was already priced in.
- “Investors are now focused on how quickly the Biden administration can implement their plans and support the ailing US economy. Although Biden will be inaugurated on Wednesday, the second impeachment of Donald Trump might overshadow the first few weeks of his term.
- “Investors are also increasingly confronted with the reality that the pandemic is still far from being under control, despite the significant progress that was made in the past few months, and several COVID-19 vaccines already on the market.”
Investors are increasingly confronted with the reality that the pandemic is still far from being under control, thereby flocking back to the safe-haven currency despite the significant progress that was made in the past few months, and several COVID-19 vaccines already on the market.