The United States Dollar registered a slight downfall this Monday morning, but analysts believe it was something normal, as little has changed since Friday’s close. As expected, financial markets were looking forward to more news regarding President Donald Trump’s health status, following the news that has has been tested positive for Coronavirus.
On Friday, following the official announcement, investors immediately started looking after safer assets, while a stock market sell-off was also triggered.
One statement to change everything
However, early, while the Asian session was still on, Donald Trump made a surprising intervention, outside the hospital where he is currently being treated, revealing that he could leave the hospital as early as today. And, as expected, this improved the risk appetite.
“FX traders cannot agree on how to interpret the recent news flow,” admitted Commerzbank’s head of FX and commodity strategy, Ulrich Leuchtmann.
“The biggest issue for the FX market is: it is uncertain whether this mas made the biggest risk of the U.S., elections – a long political and legal battle about the result – any more or less likely. A battle of this nature is only likely if the contender Joe Biden wins,” he added.
The relief package, to impact the dollar?
Investors are also eager to hear new details from Washington regarding the coronavirus relief package, following House Speaker Nancy Pelosi’s report on the progress in the discussions.
“Concrete developments have been thin on the ground and we doubt investors will want to chase risk assets until more clarity has emerged,” strategists from ING said in a note to clients, adding that they believe the USD index will trade in tight ranges.
This Monday morning, the dollar slipped against multiple currencies but, on the other hand, the index managed to hold close to recent ranges, being down less than 0.1% on the day, at 93.785, early in the morning.
It will be very interesting to watch how these last values will be impacted this week, after the U.S. Federal Reserve’s meeting minutes, scheduled for Wednesday, and the European Central Bank meeting minutes, due on Thursday.