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Dollar Reverses Its Course and Stocks Hold Steady

July 5, 2017
by Latisha Liming
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In recent days, several central banks in major economies have released hawkish statements. These mean that the global economy is on the recovery path. It excited the investors who understood that easy money is not just associated with the United States. Due to the increased interest in other global currencies, the demand for USD faded in the market. As a result, USD plunged to its lowest in this year on Thursday.

The US Federal Reserve has been hawkish about the whole economic situation despite weak economic data released in the past few weeks. Bank of England has also commented that it is hoping for an interest rate hike when the economy becomes even better in the upcoming years. The Bank of Canada also commented that it is hoping to establish a tightened monetary policy in July. The European Central Bank also commented that the institution will be more accommodative in the future.

Immediately after the comments from Draghi, EUD rose against the dollar reaching its one-year high. On Thursday trading, EUR/USD climbed to $1.1405 as the currency gained 3% in a few days. The Bank of Japan has not shown interest in toning down the stimulus and this has increased the interest in Euro further.

The dollar index reached 95.754 as the greenback weakened. The short term yields of Germany bonds increased to reach its highest value in the year. US 10 Year Treasury yields have climbed 11 points. The S&P 500 score has also attained its largest gain in a single day in the past two months.