fbpx

USD dips down, GBP on the rise

Chris Lee

USD dips downwards but GBP is on the rise

Uncertainty continued to dominate the forex world on Wednesday after a session of complicated currency trading.

The dollar was down over the course of the day, a dip attributed by some to a rise in the value of US stocks.

While on the face of it, this would appear to be good news for the dollar, the greenback tends to drop in value when domestic US economic news is good.

This is because good news from the US economy tends to lead to investors looking for more risky places to invest than the dollar.

The greenback’s index, which is an artificial tool offered to traders that consolidates the performance of the greenback against six other global currencies, was down by half a percentage point.

It was seen at 96.527 at one stage on Wednesday.

The dollar did particularly badly in its pair against the safe-haven currencies.

Against the Japanese yen, for example, the dollar dipped over the course of the day to 107.44 yen.

It plummeted by half a percentage point against the Swiss franc at one stage, reaching 0.9382.

This poor performance of the dollar may also have been down in part to fears that the coronavirus pandemic is worsening in the US.

According to figures from the authorities in the country, there have now been 2,932,596 cases of coronavirus in the country.

Over 130,000 people are believed to have died from the disease.

On Tuesday, it was revealed that 322 new deaths had occurred compared to the day before.

One particular winner over the course of the day was the British pound, which shot up in value following an announcement from the British government that a comprehensive jobs plan would be offered to workers in the country.

The government intends to spend around £30bn on various suggestions, including tax reductions for businesses such as cafés and restaurants.

Firms will also be incentivised to return workers who had previously been on furlough to their positions.

The pound was up by two-fifths of a percentage point at one stage, reaching $1.2588.

This came after some dips for sterling earlier in the day.

In Asia, meanwhile, several currencies there found themselves stuck after worries that the coronavirus may spike again.

In Australia, however, there was a rise on the cards for the dollar there in its pair up against the greenback.

It was seen up by 0.4% in this pair.

In New Zealand, the local dollar sped up by a fifth of a percentage point against the US currency.

The Canadian dollar was also up, this time by half a percentage point.

The connecting factor there is that these currencies are all dependent to one extent or another on the exporting of commodities.

However, overall, the day’s trends remained hard to extrapolate.

Analysts blamed the apparent stagnation in part on a lack of obvious signs of growth coming out of any major economies.

Until that next happens, they said, the coronavirus will continue to dominate the headlines.

Risk Statement: Trading Foreign Exchange on margin carries a high level of risk and may not be suitable for all investors. The possibility exists that you could lose more than your initial deposit. The high degree of leverage can work against you as well as for you.

Chris Lee
Forex.com logo74% of clients lose money. Capital at risk.

- Trusted Global Market Leader
- Online FX & CFD Trading
- 180+  Global Markets, 84 FX pairs, 65 shares, 17 popular indices and more
- Forex, Indices, Commodities, Equities & Bitcoin
- Available to US traders

eToro LogoYour capital is at risk

- Trade 15 cryptocurrencies
- Beginner friendly