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USD continues positive form

03 Sep 2020

The U.S. Dollar continued its rise on Thursday amid worries regarding about the European Central Bank. Traders noted that the ECB was unsure of the euro’s rise, and therefore sold the currency, betting against the USD.

Earlier this week, ECB chief economist Philip Lane claimed that the exchange rate “does matter” when it comes to deciding the monetary policy. 

However, currency analyst Lee Hardman said, “Overall the comments suggest that an immediate policy response from the ECB to help weaken the euro appears unlikely, and they will rely more on jawboning to dampen euro strength for now.”

The USD now trades almost 1.3% above the 28-month low from Tuesday. Against a basket of currencies, the greenback trades at 92.26. On the other hand, the euro fell to 1.1806.

Moreover, the British Pound is struggling against the USD due to the coronavirus impact on the UK economy as well as the Brexit negotiations. 

“Over the past few days Sterling was able to benefit from a EUR and USD weakness. At the same time investors seem to be ignoring idiosyncratic factors,” strategist Thu Lan Nguyen noted. 

At the time of writing, the GBP was being traded at 1.3295, down by 0.4%. 

ING reports, “EUR/GBP is pressing support at 0.8865, helped by the slightly softer EUR. Our preference is that this support level holds, before fresh rounds of Brexit brinkmanship from both sides weighs on GBP over coming weeks.”