Forex: Where will the dollar and its price go? A question that will always exist in the Forex market around the American currency, since the dollar will always be in the eyes of investors.
Because of the coronavirus pandemic, investors have consolidated their confidence in the dollar. It is considered one of the most profitable currencies for high-risk investments.
In these uncertain times, investors need to insure their money in the most feasible way they know how. However, many events have shaken the American nation in the last quarter. And with that comes the question of where the price of the dollar will go.
The dollar as a safe investment: How far can it go?
With the COVID-19, being the shadow of threat from the United States, the dollar’s gains could be called into question.
If the US virus cases had not reached new highs above 50,000 this Wednesday, the US economic reopening would have been excellent news.
However, for the U.S. economy, the outlook is uncertain and there are signs of early vulnerability.
So, while the stock market gains signal optimism, hesitations about the robust labor market report are increasing.
In addition, the U.S. COVID-19 outbreak will be the main driver of market flows. For, the accompanying government responses will determine whether these advances in the economy will be sustainable.
Expectations persist ahead of the July 4th festivities in the United States, as this holiday is expected to cause more coronavirus infections in the American states.
In addition, the euro retained its lead last Thursday despite an improved non-farm employment report and mixed data from the eurozone. Maintaining the dilemma of: Where will the dollar go?
Low Volume for Independence Day
Will there be positive forecasts for the American currency?
After a strong appreciation of the U.S. currency by investors due to the COVID-19 crisis, which brought the dollar to $1,069 in March, it is now back to normal and returns to its natural range.
Thus, the reopening of the economies promises to alleviate its condition as the reserve currency par excellence. Thus, it promises to remain a successful option in the Forex market.
However, projections for Monday consider a slight drop in the price of the American currency.
This is in anticipation of the release of the COVID-19 rally following the July 4th festivities.
Finally, the result of the recent employment figures released by the US employment department will be seen, knowing the stance taken by investors in the Forex market.
Although, it is not expected that the figures will be as bad as the ones from the U.S. market, but only a slight drop from investors as they wait to test the market’s behavior on Monday, hoping to see how far the dollar will go.
It is worth mentioning that, a clear competition promises to emerge. The greater European coordination around the Recovery Fund and the possibility of issuing joint debt for its financing, strengthen the cohesion of the group and reduce the weakness of the Euro.