The dollar marks its monthly low in the middle of the week against the euro. After having a weak start on Monday in the Forex market.
Tense news continues for the dollar. Its instability is increasing against other currencies. Thus, the greenback continues to trade at low ranges against the other currencies that have managed to establish themselves again in the Forex market.
As the week progresses, and the conditions of the pandemic in the U.S. become more negative, investors are slowly turning away from the U.S. currency.
The USD is trading in a mixed environment this Tuesday.
The Dollar is no longer a safe haven
The deteriorating political and social situation in the United States, with the vague control of the relevant authorities in curbing COVID-19 infections in the states, leaves much to be desired.
The United States currently has the most active local cases of the disease, and they are increasing every day.
Florida, which has become an epicenter of the new outbreak, reported 133 new deaths from Bitcoin Freedom on Tuesday, bringing its death toll to more than 4,500. There are 3.4 million confirmed cases to date in the entire United States.
This, coupled with advances in an experimental Coronavirus vaccine by a private American company, has created a risky environment among Forex investors.
Although the vaccine has already been tested on 45 individuals, all of them generated a not very positive immune response.
Moreover, there is even more reason to be cautious. For, the dollar promises to keep its negative pace with worsening tensions between the U.S. and China and fears of the Coronavirus.
Thus, investors have turned their attention to currencies that have been regaining their stability in the Forex market.
US Currency Overshadowed by Euro
The dollar marks a monthly low in the middle of the week. The dollar index fell below 96 for the first time since June, dropping to a one-month low of 95.77. Its last quote fell 0.20% to 95.96.
The EUR saw overnight gains, extending to a four-month high of $1,1450 against the dollar, near the Euro/Dollar peak of $1,150 in early March. It last rose 0.18% to $1,142.
The reason is simple: with the dollar pulling away, it is allowing other currencies to take the lead, leaving the U.S. currency lagging behind other currencies in the Forex market.
In addition, analysts at Action Economics explain that the Euro will continue to grow in the currency market, as investors wait for the European Union leaders to agree on a Coronavirus recovery fund.