The Thursday forex trading statistics show that the U.S. dollar has marginally gained ground on world’s major currencies after sliding on Wednesday. Even though expected by economics and financial analysts to be temporary, the dollar rose higher against yen by 0.2 percent. This saw a dollar trade for 109.22 yen. One average, the dollar rose by 0.1 percent against the world’s six major currencies usually used by financial analysts to gauge its strength. This translates to a dollar trading at 93.231 against these currencies when put into one basket.
A Welcome Temporary Respite for Forex Traders
The news of the gains by the dollar comes at a time when the world many economies and forex markets are facing uncertainties over the outcome of a major economic summit scheduled for December and a Federal Reserve Bank’s announcement on a reduction of its balance sheet penciled for August. These uncertainties have seen the euro slide below $1.18 while the yen is also struggling. The new gains come on the backdrop of turbulent times for the dollar after its staggering 14 percent weakening against the already sliding euro.
The poor showing by the dollar this has been driven by the political upheavals at Capitol Hill. The bullish showing by the dollar in the run up to President Donald J. Trump taking over office has been worn out by the crumpling of the tax cuts promises made during the campaigns. This has been exacerbated by the failure of the administration to implement some of the pro-growth policies pledged in the run up to the elections.
Will the Bubble Burst?
The current strengthening of the dollar comes at a time when the government is facing backlash from some political quarters after the president gave the Congress an ultimatum to put in place legislations that will see the promised Mexico-U.S. border wall built or he will grind government activities to a standstill. While his comments raffled a few political feathers at the Capitol Hill and shook many financial markets, investors pegged their investment in the dollar on the positive employment statistics released recently.
Whether the new gains hold steady depends on more than the expected Fed announcement. In December, Wyoming will host the Jackson Hole Economic Policy Summit where key leaders from the U.S. and Europe will deliver key speeches that will affect many economies. Key among those expected to deliver keynote speeches are Mario Draghi who is the president of European Central Bank and Janet Yellen, the chair of the U.S. Federal Reserve Bank.