- The euro was one of the major currencies to lose out in Monday’s forex trading, with the currency hitting a series of low points
- The dollar mopped up gains almost across the board
- The dollar did not, however, surge against the Japanese yen, which managed to hold its own
- The Turkish lira was down significantly, seeing more than a percentage point of its value wiped off
The single European currency was down to one of its worst performances in several months on Monday as trading for the week got squarely underway. The currency was spotted at $1.1635 against the greenback at one stage, which was just a short jump higher than its Friday position of $1.16125. The developments with the euro have arisen largely because of a move towards buying up the dollar in the face of a second wave of the coronavirus pandemic. The greenback is perceived as a safe bet at the moment due to the fact that it can be liquidated and turned into cash very easily – meaning that, in an economic downturn, those who hold dollar investments have more options for meeting payment obligations.
The dollar index, which monitors its performance in proportion to several other global currencies, hovered at 94.530. This came after it reached closer to the psychologically important 95 level last week. According to analysts, the move in favour of the dollar came in part because of the global switch away from risk. However, it also came because of a surge in the value of bond yields.
In other currency pairs, the greenback was also up. The Turkish lira, for example, saw a dip of over 1.5% against the dollar. Turkey recently instituted a rise in interest rates, bucking a wider trend towards low rates set elsewhere. Forex investors, however, appear to have decided that they are unconvinced by this decision.
The dollar’s overall sense of promise was dented at one stage by the news that it had not surged quite as much against the Japanese yen – another currency famous for being a so-called safe haven. In this pair, the dollar was seen at just over 105 – meaning that no major changes to its value had occurred. The dollar could face other challenges as this week unfolds.
The upcoming US presidential election is likely to feature heavily in the week’s forex trading. Joe Biden and Donald Trump will go head to head on Tuesday during their first debate. One issue on the cards could be the apparent failure – at least for now – of the country’s Congress to agree on a financial aid system for those affected by the pandemic. Question marks over Trump’s tax returns are also likely to feature. The president has been beset by accusations made in a major US newspaper that he has paid little tax in recent years.