Dollar Set for Sixth-Weekly Slump ; Experts See Limited Rebound

Dollar Set for Sixth-Weekly Slump ; Experts See Limited Rebound  | Jul 30, 2020 19:50

Dollar Set for Sixth-Weekly Slump ; Experts See Limited Rebound

By Yasin Ebrahim – The dollar remained on track to post its sixth-straight weekly slump after falling on Thursday as economic data exacerbating worries about a slowdown in the economy led some experts to warn that good times for the greenback will be limited.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, fell 0.42% to 93.04.

The U.S. economy suffered its biggest slump on record in the second quarter, and signs the labor market continues to stutter have diminished the prospect of a speedy recovery. This will likely keep a lid on the greenback's chances of mounting a comeback.

"(T)he greenback’s reputation has suffered to such an extent over the past weeks that its appreciation potential is limited," Commerzbank (DE:CBKG) said in a note.

U.S. GDP declined at an annualized rate of 32.9% in the second quarter of 2020, less bad than the expected decline of 34.5%, but still the biggest decline on record.

At the same time, the Labor Department said that the number of Americans making initial claims for jobless benefits rose for the second straight week, albeit by only 12,000, to 1.434 million. Continuing claims, which are reported with a one-week lag, also rose.

Federal Reserve Chairman Jerome Powell highlighted the signs of cracks in the pace of the recovery during a press conference on Wednesday.

“It looks like the data are pointing to a slowing in the pace of the recovery," Powell said.

But the virus' impact on the economy is not the only challenge keeping the dollar down. The ongoing deterioration in U.S.-China relations has also sparked concern.

"It is by no means our assumption that the US dollar will lose its status as the world's reserve currency any time soon; but the corona crisis and the US-Chinese conflict have sown sufficient doubt to justify an increased risk premium for the dollar."

Related News

Latest comments

Add a Comment
Please wait a minute before you try to comment again.
Daniel Ang Sak Ping
Daniel Ang Sak Ping

Eurusd  ... (Read More)

Jul 30, 2020 22:13 GMT· Reply
Write a reply...
Please wait a minute before you try to comment again.

Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.

English (USA) English (India) English (Canada) English (Australia) English (South Africa) English (Philippines) English (Nigeria) Deutsch Español (España) Español (México) Français Italiano Nederlands Polski Português (Portugal) Português (Brasil) Русский Türkçe ‏العربية‏ Ελληνικά Svenska Suomi עברית 日本語 한국어 简体中文 繁體中文 Bahasa Indonesia Bahasa Melayu ไทย Tiếng Việt हिंदी
Sign out
Are you sure you want to sign out?
Saving Changes


Download the App

Get free real time quotes, charts and alerts on stocks, indices, currencies, commodities and bonds. Get free top of the line technical analysis/predictors. is better on the App!

More content, faster quotes and charts, and a smoother experience is available only on the App.