Dollar Holds Gains post Friday’s Sharp Rebound

Dollar Holds Gains post Friday’s Sharp Rebound


The dollar index, which measures the greenback against a basket of major currencies, hovered around 93.50 following Friday's rebound from 92.55, its lowest level since May 2018. During the past three weeks, the dollar tumbled as investors believed that the United States would struggle more than rivals. However, the worse-than-expected GDP reading from the Eurozone on Friday returned some strength to the dollar. The EURUSD declined to $1.1740 after trading at $1.1909, the GBPUSD fell to $1.3054 from $1.3170, and the USDJPY bounced-off a 104.18 to 106.43. Market participants are looking forward to a series of economic releases this week to assess the US economic recovery.


Major US stock-index futures started the week on a softer note as investors continue to assess the earning season and the stimulus talks. Last week, the solid earnings of tech giants boosted risk sentiment, but still, many corporations are facing difficulties due to the continuous spread of the Coronavirus. On the other hand, investors are looking forward to the next round of fiscal stimulus, which the republican and democrat lawmakers are clashing over. The Dow Jones Industrial Average futures declined to 26197, the S&P500 futures dropped to 3254, and Nasdaq futures eased to 10881.


Gold prices rose to another record high of $1984 during the early trading hours of the week, supported by the growing risk over the economic recovery due to the virus spread. Meanwhile, the price of a silver ounce held steady near $24.30, and palladium futures were flat near $2130.


Oil prices drifted lower amid mounting woes over excess supply. Top oil producers started reducing their output cuts as agreed, while the market recovery is still very fragile. The West Texas Intermediate crude September delivery fell to $39.56, and Brent blend October delivery dropped to $42.86.

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