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Date:
03rd Feb 2021
Author:
CryptoAltum News Team

USDX Rises above 91, Euro, JPY Relatively Weak

Despite overall caution, the USDX is strongly trending above 91 just when the Stock market and major US indices are printing higher, reversing fortunes of last week when they plunged to the most since October 2020. Specifically, the USD is stretching gains versus the JPY, as the coronavirus' effects are being felt. Within the United States, the stock market surge comes on news of moderate Republicans accepting a $600 billion stimulus package, a move that still won't prevent a political battle, forcing investors to flock to the USD as a haven asset.


Details: 

The USDX is trending at a seven-week high, trading above $91. Investors are comparing situations between the US and especially Europe, an economy that's facing headwinds due to coronavirus and the government's failure to distribute vaccines weighing negatively on its economy. Already, a recent economic report reveals that the Eurozone economy contracted in Q4 2020 as lockdowns and other restrictions come back to haunt the zone. For instance, Germany's retail sales fell more than expected in December, slumping 9.6 percent, as coronavirus restrictions choked spending.


Impact on the USD: 

Bullish. Confidence in the US and global economic recovery, short-covering against the oversold USD positions, the influx of capital to the greenback as a haven are cumulatively pushing the reserve currency to new 2021 highs. Deteriorating macro-economic conditions in Europe and the coronavirus situation in Japan place the USD at a vantage position as buyers look to add to their longs, reversing losses of 2020.


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