Breaking News
0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Dollar Weakens; Fed Expected to Act in December

ForexNov 30, 2020 07:57
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters.

By Peter Nurse

Investing.com - The dollar drifted lower in early European trade Monday, as lingering vaccine optimism and expectations of more Federal Reserve largesse see traders desert this safe haven.

At 3:55 AM ET (0755 GMT), the U.S. dollar index, which tracks the greenback against a basket of six other currencies, was down 0.1% at 91.705, having fallen to its lowest level since April 2018 and set to record its largest monthly fall since July, down 2.5%.

EUR/USD climbed 0.1% to 1.1968, close to a three-month high, while USD/JPY fell 0.1% to 104.03. 

“We expect USD to stay on a gentle downtrend as the prospect of the Fed adding more liquidity if needed should keep a floor below risk assets and the U.S. data-flow may remain mixed,” said analysts at ING, in a research note.

Largely promising trial results for three major vaccine candidates have prompted investors to seek out riskier assets, with the dollar being hit hard as a consequence, even with the wave of new infections, and fresh lockdowns,  across Europe and the United States.

Given the absence of new fiscal stimulus from U.S. lawmakers to help the economy during the second Covid wave, investors now expect the Federal Reserve to step in with more bond buying, when it next meets in December.

With this in mind, Fed head Jerome Powell’s testimony before Congress on Tuesday and Wednesday will be studied carefully for clues as to the central bank's thinking, as well as the monthly jobs report at the end of the week.

GBP/USD gained 0.3% to $1.3348, not far off a three-month high of $1.3399 seen late last week, as investors wagered a Brexit deal would be brokered in the near future.

The two sides are running out of time to clinch a Brexit trade deal, Environment Secretary George Eustice said on Monday.

"This is the crucial week, we need to get a breakthrough," Eustice told Sky News.

“The levels at which GBP is trading is still telling us that very little of the worst-case scenario is being priced in,” added ING. “Accordingly, should negotiations definitively collapse, the downside reaction should still be asymmetrical.”

 

Dollar Weakens; Fed Expected to Act in December
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email