Today we are observing a minor weakness in the American dollar. This was caused by yesterday’s statements by the International Monetary Fund, who said that the USD right now is overvalued by 6% to 12%, compared to what the fundamental reports from the United States are showing. The higher value likely comes from trading activity, interest in the dollar pushing demand up.
However, the IMF’s report, as well as lower than expected U.S. Treasury yields have now pressured the USD, pushing it back to the lower values from a few days ago. The dollar index dropped to 96.76, after hitting 97.44 yesterday (on Wednesday the increase was caused by good retail sales data).
The USD is expected to weaken further as the Federal Reserve gets ready for the first interest rate decrease in a decade.
The British pound made a small correction-recovery to 1.2432 against the dollar. It remains under pressure due to the prospect of a no-deal Brexit, especially considering Boris Johnson’s likely election as Prime Minister.
The euro climbed to 1.1234 versus the USD today. Its capacity for growth is limited by the impending monetary policy softening by the ECB.
