The Reserve Bank of Australia said that it is assessing policy options, including negative rates and currency market intervention. Thus, it added pressure on the Australian dollar.
ING strategists wrote in a note to clients that, coupled with the November United States Presidential elections, the outlook for risk assets will most probably be tricky for the coming weeks and months.
ING said that it did not forecast the dollar to see long-lasting gains. Nevertheless, the United States dollar liquidity was not an issue as it was in March. The United States Federal Reserve will step in if risk sentiment fell further.
They said that for DXY, they forecast the 94.00 level to be strong resistance this week.
Against the United States dollar, the euro was down 0.4% at $1.17235.
Also, the Norwegian and Swedish crowns fell. At 0725 GMT, they reached a two-month low of 9.3615 against the United States dollar. Furthermore, they weakened against the euro.
News About the Dollar
As forecasted, Sweden’s Riksbank kept its rate unchanged at zero percent. It said that it is expected to remain there in the coming years.
From 1430 GMT, United States Federal Reserve Chair Jerome Powell will speak at the congressional committee.
Markets turned risk-averse about new lockdown measures and a surge of virus cases in Europe. Thus, the United States dollar rose to six-week highs on Tuesday. From the previous session, it extended gains.
The currency market saw ‘risk-off’ moves, and stocks sold off on Monday. So, the greenback index climbed to its six-week high.
European equities opened higher on Tuesday. Nevertheless, the United States dollar continued its ascent, and riskier currencies fell. It happened because of the new lockdown measures. Those measures appeared to strike the second wave of coronavirus infections. Nevertheless, lockdowns are posing a threat to a global economic recovery.
The United Kingdom will see further restrictions.