Dollar Forex Market Strengthens As Fear Seizes Traders
- Dollar off low against the pound and the euro
- Other factors help maintain some positivity
- Big Tech criticized on Wall Street
The week started off on the back foot for many trades not only in the forex market, but also in the broader stock markets. Strong downward action to start the week succeeded in pushing the dollar out of the lows it hit following missing US jobs data late last week. The Euro and the Pound lost some ground still trading at good levels with many positive factors in their favor heading into this week. Meanwhile, on Wall Street, the tech-savvy NASDAQ has suffered big losses as inflation fears persist.
Euro and pound hold steady despite dollar rebound
Despite crossing high levels, the Euro continues to trade above 1.21 even as the USD regains force majeure as a safe haven for many fearing economic overheating and a pullback to the currency. On the European side, the currency remains supported by a steadily improving COVID-19 vaccination campaign and the fact that nearly 30% of the entire region have had at least 1 sting with cases continuing to fall across the block.
In the UK, the British pound continues to trade near recent highs ahead of a busy day the Queen will speak for the first time since her husband’s death in what marks the reopening of the UK Parliament. This is an important event that gives the government an opportunity to present its plans for the months and year to come and is usually closely watched by traders.
The reopening continues to be positive
While there was a surprising lack on US employment numbers last week and the markets took some beating, especially in yesterday’s trading session, there is still a number of positive points for these currency exchanges. A look at the UK shows that the reopening continues at a steady pace and that the EU is moving in this direction as well, the broader outlook is positive. This is reflected in the strength of the two currencies.
The US Federal Reserve alongside its counterparts at the ECB and the Bank of England also appears poised to continue promoting the positive message that it remains committed to supporting the economy. They also double down on the comment that they think all inflation is transient, as forex brokers continue to see a dollar rise.
Tough day on Wall Street as NASDAQ drags losses
Records are made to be broken and yesterday, unfortunately, the major indices fell from their previous records. These were led by NASDAQ, which lost more than 2.5% during the session.
These losses appear to stem from lingering fears about inflation and the possibility of raising rates that have hit these fast-growing tech names. Other sectors of the economy continued to benefit from this rotation, particularly infrastructure and commodities, many of the latter remaining in short supply relative to demand.