US Dollar Declines Despite Increased Bullish Bets
This Friday the dollar saw a decline as it recorded a weekly loss. However, there has been an increase in bets on the greenback as investors predict that the FEDs are working towards putting control and better management on the monetary policies before the year runs out. Following the charts on the USD, the greenback when estimated with six main currencies reduced to 92.51 having a 0.57% decline rate.
August 10, saw the USD position grow to $3.08 billion from its position of $2.11 billion which it was in in the previous week, as recorded by Reuters and CFTC. This rise was the highest the dollar had attained since the beginning of March. Following new concerns that the recent rise in Covid cases would threaten the economic rebound, this data was happily received.
Consumer Sentiment
In July the consumer sentiment, as recorded by the University of Michigan was 81.2, however following the first analysis in August the index has seen a decline as it drops to 70.2. This is the lowest it has been since the index of December 2011. Jefferies mentioned that one of the most shocking effects the Delta variant of the Coronavirus had on the economy was the fall in the University of Michigan consumer sentiment.
A decline in Treasury Yields
Following the decrease in Treasury yield, the dollar has declined and this leaves investors with concerns. Their major worry is that the new rise of cases of the Delta variant would hinder the dollar’s rebound. Following Jefferies’ comment, he noted that the Covid has returned and is currently having a surge which is a huge threat to the US economy.
These concerns don’t seem to worry the Federal Reserve as they are not moved from their plan on tapering as Wall Street anticipates about $120 billion monthly transactions to be cut back as the year runs out. Morgan Stanley commented on this, stating that the growing worry of surging Covid cases and concerns on inflation cannot hinder the Federal Reserve from following its tapering plan. As further comments on tapering from the Fed’s Jerome Powell are anticipated for next week, investors seem to place their bets on signals from the Central Bank as regards the tapering decision.
