Dollar Falls As Risk Sentiment Shrugs off Unrest

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Dollar Falls As Risk Sentiment Shrugs off Unrest

The U.S. dollar continued to take on water overnight, falling across the board as global equities traded higher.

Overview

The Bloomberg Dollar Index fell to its lowest level since March 12th, at the beginning of the widespread lockdowns in the U.S.  Risk sentiment in the U.S. continues to be strong, seemingly shrugging off the unrest that was escalated last night.  U.S. equity futures show the market will open about half a percent higher.

Petro-currencies are also taking advantage of a rally in the price of oil.  Oil rose to the highest level since mid-March.

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EUR

The Euro pushed to new highs versus the U.S. dollar and is currently trading at its strongest price since mid-March.  European equities shot higher on news that Germany is getting closer to finalizing a second stimulus package worth 100 billion euro to recover from Covid.

The common currency continues to rise even as traders expect the European Central Bank to increase their asset purchase program on Thursday.  We expect the EBC to extend their balance sheet by an additional 500 billion euro.

AUD

The Australian dollar rallied more than a percent for a second day as the antipodean currency continues its march back from lows in March.  Indeed, Aussie is now at its strongest level since January 23rd.  The Reserve Bank of Australia left rates at 0.25% overnight.  While the move was expected, the central bank did hold a fairly upbeat tone which gave traders the impetus to send the pair higher.

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