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Dollar Turns Weak Against Peers

Dollar Turns Weak Against Peers

The U.S. dollar was weak against most of its peers on Thursday as improved risk sentiment after drove investors to assets such as equities.

Election results seem to indicate a win for Democrat Joe Biden in the presidential race. However, the Republicans look set to take control of the Senate.

Stocks gained in strength amid increasing possibility of a divided government with Biden as President and Republicans controlling the Senate.

The market was also reacting to the Federal Reserve’s monetary policy move, as well the Bank of England’s (BoE) take on its interest rates and asset buying program.

The BoE expanded its asset purchase programme by a more-than-expected GBP 150 billion, rising it to GBP 895 billion, and retained its record low interest rate (0.1%) as the economy entered a second lockdown.

The Federal Reserve today left interest rates unchanged at near-zero levels. The accompanying statement said the Fed expects rates to remain unchanged until labor market conditions have reached levels consistent with the central bank’s assessments of maximum employment and inflation has risen to 2% and is on track to moderately exceed 2% for some time.

The Fed also said it plans to increase its holdings of Treasury securities and agency mortgage-backed securities at least at the current pace to sustain smooth market functioning and help foster accommodative financial conditions.

Data released by the Labor Department showed first-claims for U.S. unemployment benefits showed a modest decrease in the week ended October 31st, edging down to 751,000, from the previous week’s revised level of 758,000. Economists had expected jobless claims to drop to 732,000.

The dollar index, which dropped to a low of 92.49, recovered slightly as the day progressed and was last seen at 92.57, down nearly 0.9% from previous close.

Against the Euro, the dollar weakened to a low of $1.1861 before recovering some lost ground. Still, at $.1834 a unit of the European currency, it was down almost 1% in late afternoon trades.

The Pound Sterling was stronger by about 1.25%, fetching $1.3153 a unit, up from Wednesday’s close of $1.2989.

The Yen was stronger by almost 1% at 103.53 a dollar, slightly off the session’s high of 103.44 a dollar.

The Aussie was gaining nearly 1.5% with the AUD-USD Pair quoting at 0.7286, firming up from 0.7182.

Against the Swiss franc, the dollar weakened to CHF 0.9039 from previous close of CHF 0.9119, while against the Loonie, it was fetching C$ 1.3051, about 0.65% less than Thursday’s close.

The material has been provided by InstaForex Company – www.instaforex.com