The dollar continues to decline against the euro, yen and pound sterling on Tuesday after a steady rise in previous trading.
The ICE-calculated index, which shows the dynamics of the dollar against six currencies (the euro, the Swiss franc, the yen, the Canadian dollar, the pound sterling and the Swedish krona), is losing 0.5% in the course of trading. On the eve of the indicator has updated a 20-year high.
The recent rise in the dollar has created an “unacceptable situation” for risky assets that tends to lead to financial or economic crises, said Morgan Stanley strategist Michael Wilson, quoted by MarketWatch.
The euro/dollar pair is trading at $0.9642 as of 3:00 pm compared to $0.9609 at the close of the previous session. On the eve of the euro has fallen in price against the dollar by 0.8%.
The pound sterling rose during trading to $1.0796 compared to $1.0688 the day before. The dollar against the yen fell to 144.47 yen against 144.74 yen in the previous session. On Monday, the US currency gained 1.5% against the pound and 1% against the yen.
The dollar is correcting as investors seek to take profits after its significant strengthening, according to Trading Economics. Experts believe that the US currency will continue to strengthen against the background of the rapid tightening of monetary policy by the Federal Reserve System (FRS). In addition, the dollar is supported by a decrease in risk appetite in world markets.
A further increase in volatility in financial markets will help strengthen the dollar due to its status as a “safe haven” currency, said Carol Kong, an analyst for the CBA foreign exchange market.
