- The US Dollar has advanced quite strongly during today’s Asian session, continuing its strong performance last week. Dollar strength is partially driven by the European energy crisis as Russia shuts down the NordStream pipeline indefinitely. The Dollar is therefore gaining most notable against the Euro, with the EUR/USD currency pair touching its 19-year low at $0.9900, while the GBP/USD currency pair is trading well below $1.1500 at its lowest price seen since the March 2020 coronavirus panic. These movements are in line with a strong, long-term bullish trend in the US Dollar, and we are likely to see lower prices in these currency pairs over the coming days. The USD/JPY currency pair has not reached a new high today but is holding up well above the big psychological round number at ¥140.
- Another factor boosting US Dollar strength is last Friday’s strong non-farm payrolls data, which seems to have increased the likelihood that the Federal Reserve will hike rates by 0.75% rather than 0.50% at its next meeting.
- Fears over European energy has sharpened focus on this week’s ECB meeting, in which the Bank is expected to hike rates by 0.75%, which will put great pressure on southern European debt.
- WTI Crude Oil is rallying a bit, but the move is nothing special. Energies are getting a small boost from the European crisis plus increased speculation that OPEC may impose a lower production quota soon.
- It is a public holiday today in the USA and Canada, so markets are likely to be quiet during the normal US session hours.
- Daily new coronavirus cases globally dropped last week for the seventh consecutive week.
- It is estimated that 67.7% of the world’s population has received at least one dose of a coronavirus vaccination, while approximately 7.7% of the global population is confirmed to have contracted the virus at some time, although the true number is highly likely to be much larger.
- Total confirmed new coronavirus cases worldwide stand at over 610.3 million with an average case fatality rate of 1.07%.
- The rate of new coronavirus infections appears to now be most significantly increasing in Niger, Taiwan, and Russia.
Forex Today: US Dollar Index Reaches New High on Euro Energy Woes
By Adam Lemon
Adam Lemon began his role at DailyForex in 2013 when he was brought in as an in-house Chief Analyst. Adam trades Forex, stocks and other instruments in his own account. Adam believes that it is very possible for retail traders/investors to secure a positive return over time provided they limit their risks, follow trends, and persevere through short-term losing streaks – provided only reputable brokerages are used. He has previously worked within financial markets over a 12-year period, including 6 years with Merrill Lynch.
Strength in the US Dollar and the indefinite Russian shutdown of the NordStream pipeline have sent the greenback soaring while the Euro and European equities weaken.