US Dollar Gains Ground After J&J Setback

US Dollar Gains Ground After J&J Setback

The US dollar is considered a safe haven asset again, as reports on Johnson and Johnson’s postponement of the clinical trial surrounded the market.

The dollar index is up by 0.1% against six others in the baskets of currencies, currently at 93.227. This is a breath of fresh air to the greenback after ending last week in another low. 

As it gained traction, it pushed the volatile euros aside as the continent is currently on the brink of a double-dip recession following slow pace growth.

EUR/USD pair shed off 0.2%, trading at 1.1795 in the latest foreign exchange charts. 

Similarly, the tumbling AUD/USD pair followed the downward trend with a significant 0.4% decrease at 0.7179.

The Australian dollar fell following media reports saying that China has halted coal imports from the country along with their deteriorating relations.

Consequently, the GBP/USD pair retreated to 1.3041 after slashing another 0.2%. In a previous session, the pairs dropped to its weakest in nearly two weeks at 0.9037 against a dollar.

Nevertheless, it regained and maintained the coveted 1.30 ceiling as progress in the post-Brexit deal out shadows reemerging restrictions.

According to insiders familiar with the matter, the upcoming EU Summit on Thursday will bring forth positive developments in the trade deal.

However, negotiations may likely continue in the coming months following the deadline.

Analysts predict that the greenback has a greater chance of retreat as gains are capped at relatively small movements. Current polls on the outcome of Presidential elections may outweigh further rally.

The latest polls suggest a bright, straight victory for the Democrat candidate and former Vice President Joe Biden. 

Should this materialize, the American economy has a greater chance to receive a bigger-value stimulus package to keep the US economy afloat.

Yen, Renminbi Trade Flat

The gaining fraction of the dollar sent most of its counterparts on retreat while Asian currencies traded at a relatively steady but flat pace.

The dollar-renminbi pair is mostly flat at 6.7471 after the People’s Bank of China announced its plan to lower banks’ reserve ratio requirement to zero.

The move is said to be a strategy to attract foreign investors through an accommodative financial policy. 

Some analysts said that more than being an appeal for overseas businesses, this is also a wise advance to keep the renminbi steady, away from going too high or too low on volatile trading sessions.

Meanwhile, the Japanese trades from green to red and back again with the next stimulus package ready for entry as early as November.

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