The last two weeks has started to see a slight turnaround in the USD, the Greenback has recovered several percent against most of the major currencies since February 25th, as the Senate took another step to pass a large stimulus bill by using the "reconciliation" process and put President Biden's plan into place. The below chart is of the USD Dollar Index, which measures the USD against its major trading partners and gives an indication of USD strength.
From November 20th, the day Biden won, the USD dropped off around 4%, it started to move sideways and now seems to be recovering back to recent highs.We have seen in the past few weeks a couple of things.
1. Stronger sentiment towards the USD
2. Stronger unemployment figures in the US in recent weeks. Non-farm Payrolls report for February. The world's largest economy gained 379,000 jobs, around double the early estimates of 182,000
3. Signs of their economy moving forward, even just a little.
What does this mean?
The effect on the currency pairs has seen the following swings in the past 2-3 weeks (Feb 25th):
AUD/USD - Down 4.3% from 0.7975 to 0.7633 this morning
EUR/USD - Down 2.7% from 1.2174 to 1.1849 this morning
GBP/USD - Down 2.3% from 1.4139 to 1.3824 this morning
GOLD/USD down 6.7% in this time also.
If you are looking at any USD purchases in the coming days, weeks, then this information is for you to be aware of as we never know which way the market will head, it's good to see what factors are contributing and where to keep an eye on things as the current short term mood is in favour of a stronger USD by the looks of the figures above. As always, feel free to contact me via email or phone if you want to discuss any options around forward contract's, limit orders, or just want to look at putting a plan in place over the coming months.