Significantly reduced traders’ willingness to hold the dollar

Traders’ willingness to hold on to the dollar has declined sharply since the early months of 2020, and with the progress made against the corona and the coming to power of the government with more moderate approaches in the United States, Reuters reports. The risk of more risky currencies for traders has increased. Although the dollar is not expected to fall freely, many foreign exchange market analysts believe that in the current situation there is room for further reversal of the dollar and that the dollar may remain in its current defensive stronghold until the first few months of 2021.

Despite the Trump administration’s efforts to wage a trade war with China, new statistics show that US imports from China have increased significantly, with US imports from China in the first 10 months of this year (January to October). 8.% higher than the figure for the same period last year. Also in November, US imports from China grew by a staggering $ 51.98 billion, up 46.1 percent from a year earlier. This would mean a further increase in the US trade account deficit.

In another pharmaceutical breakthrough against Corona, Modrena Pharmaceuticals has announced that it will soon receive FDA approval to distribute the company’s vaccine in various states. Previously, the preliminary stages of using Pfizer vaccines had been finalized. Traders are hoping that the corona nightmare that has gripped the world since February 2020 will reach its finish line in the next few months and accelerate the pace of normalization.

On the monetary policy side, the US Federal Reserve is expected to continue its current practice of keeping interest rates at one of the lowest levels in a decade. According to some financial experts, next year we will probably not see a significant change in the implementation of the Federal Reserve’s expansion policy.

Negative inflation and recession, along with rising unemployment, have created difficult conditions for European policymakers to revive their countries’ economic growth, and it will probably take two years for the situation to return to pre-Corona crisis. In a new assessment of the country’s economic situation, the Bank of France announced that the country’s economy will shrink by about 9 percent this year due to the corona outbreak, travel restrictions and widespread closure of businesses, which, if realized, would be the worst performance of the second largest economy. The EU will be over the last decade.

The world economy is still under the influence of the corona, and as the United Nations Conference on Trade and Development predicts in a report, the average economic growth of the world countries this year will reach negative 5.6 percent, which, if realized, will be the worst performance since The financial crisis of 2009 is still considered. Although this report is still a disappointing report, it is a relative improvement over the previous negative 9% forecast. The United Nations has previously warned that some eight million people worldwide will be impoverished by the corona.

Republicans and Democrats have not yet been able to reach an agreement on the details of the new support bill, and Congress Speaker Nancy Pelosi has said it will likely be postponed until after the Christmas break. The second package to support the economy against the effects of the corona will cost about $ 900 billion and is set to replace the previous $ 3 trillion support package. The new package will focus on supporting small and medium-sized businesses and paying direct cash subsidies to the unemployed.

Contrary to the US Federal Reserve’s efforts to increase US inflation, the average inflation rate of the world’s largest economy in the 12 months to November remained unchanged at 1.2 percent from the same period last month, which is 0.1 percent lower than It is the previously expected rate and the lowest inflation rate recorded in the United States in the last quarter. The US Federal Reserve is aiming for inflation above 2%.

On the other hand, the number of applicants for unemployment benefits in the United States has reached 853 thousand people, which is the highest number recorded in the last three months. As coronary heart disease and death rates remain high in the United States, many businesses, especially small businesses, are operating at minimum capacity and have stopped hiring new staff.

The first shipments of the Corona vaccine have been distributed in a number of countries, but in the UK, which was the first country to initiate general vaccination, some people have reported an allergic reaction to the vaccine, which has made the UK Ministry of Health sensitive. To avoid vaccination until the allegations are verified.

So far, more than 75 million 151 thousand 46 cases of coronary heart disease have been reported, among which one million 665 thousand 504 people have lost their lives. Among different countries, the highest casualties were in the United States with 316,929, Brazil with 184,826, India with 144,829, Mexico with 115,769 and Italy with 67,220. .

The acceleration of the corona outbreak has led to new records of daily deaths from the corona virus, to the point where on December 16, with 13,558 feet in one day, the previous record of December 10 with The record was 12,918 feet, failing.

“In simple terms, the current value of the dollar is too much for traders, and that’s why I think the bad days of the dollar continue,” said Kate Jokis, a foreign exchange strategist at General Societe Bank. Markets are reacting to what is happening in monetary policy, and with the current situation, there is a lot of pressure on the dollar. Compared to the first months of the year, the attractiveness of the dollar for many traders has decreased.

Dollar Index

The dollar index, which measures the exchange rate against a basket of global currencies, closed 0.68 percent lower at 89.748 today. The exchange rate of each Swiss franc was announced as $ 1.13 (the above rates are calculated according to the closing hours of trading in New York foreign exchange markets).

European currencies

In the most recent trading session, the pound traded up 0.56 percent from the previous day at $ 1.357. The euro rose 0.54 percent to $ 1.222 after entering the 1.22 channel.

Asian currencies

In Asian currency markets, the dollar fell 0.27 percent to 103.138 yen. Against the Australian counterpart, each US dollar was traded for $ 1,312. The exchange rate of the dollar was also equal to 6.534 Chinese yuan.