Dollar down for first time this month
Wednesday 9 September, 2020
Daily Currency UpdateUSD - United States DollarThe US dollar traded lower this morning against its major counterparts for the first time in several days. The US Dollar Index was down a third of percent.The drop in the value of the US dollar coincided with Wall Street’s opening bell. The S&P 500 was up 2% from the previous day. As we’ve seen for the last six months, the demand for the dollar has correlated with equity markets.Investors and traders have pushed the equity higher, and in their efforts to find to profit, they’ve taken their investments abroad. That in turn has pushed the dollar lower.The dollar has increased in value each time there’s been a drop in the equity market. When investors sought profit from their portfolio’s the US dollar became a haven currency. This trend continued this morning.
Key MoversPrime Minister Boris Johnson's ongoing demands and threats to walk away from discussion if the EU does not budge put significant pressure on the pound. Internal frustration in the UK government is growing, as a senior lawyer quit over disagreements around how the withdrawal agreement should be negotiated. According to senior figures in Germany, the latest signals from London did not raise hopes for a Brexit deal.The Australian Dollar fell through trade on Tuesday, giving up supports at 0.7260 amid a broader safe haven push. Having drifted sideways for much of the domestic session, bouncing between 0.7280 and 0.7310 the AUD corrected sharply lower overnight as US investors returned from the Labor Day long weekend and resumed last week's equity sell-off. The shift in risk sentiment through the end of last week and start of this week has seen the AUD give up 24-month highs above 0.74 to touch lows at 0.7210.Safe Haven currencies outperformed through trade on Tuesday as the rout on US and global equities continued through trade on Tuesday. The CHF, JPY and USD enjoyed strong gains as commodity and growth correlated currencies shifted sharply lower. The USD climbed off 28-month lows to post a fresh four-week-high, buoyed by a broader risk off tone and GBP correction.
- EUR/USD: 1.175 - 1.182 ▼
- GBP/USD: 1.289 - 1.304 ▼
- AUD/USD: 0.719 - 0.727 ▼
- USD/CAD: 1.315 - 1.325 ▼