USD plummets yet another time

21/05/2021

The US dollar gave ground on Thursday, giving back the gains it made on the FOMC minutes, thus once again moving to the multi-month lows. 

The US dollar index that tracks the currency against six major rivals now stands at 89.763 which is still low considering its past performance. The risk-on rally is seen as the cause for the continuing retreat of the greenback. However, EUR/USD bounced back from the short-term key support area to 1.2230 and is showing a slightly bullish trend in the near future. If the pair can cross the 1.2245 mark it will gain a bullish momentum and recover at a faster pace. 

On the other hand, the S&P futures stayed positive and defended the bulls by moving up around 0.24%. A push for vaccinations in Japan and mixed updates from major Asian nations regarding COVID are seen as the cause for this. Despite this bearish undertone in USD, the price of gold still remains on the back foot breaking lower towards the $1860 mark. Even the Asian equities that showed a mixed trend failed to motivate the gold price. However, Fed officials downplayed the situation and said that the inflation pressure is only temporary even though the economy still has a long long way to go towards a full recovery.

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