Fundamental Comment

Dollar extends losses ahead of US retail sales

Dollar extends losses ahead of US retail sales

The US dollar widened its losses against major currencies on Tuesday, record a decline for a fourth consecutive session, ahead of important U.S. data, including retail sales and industrial production. 

The dollar index, which measures the performance of the federal currency against a basket of six major currencies, showed a decline today to record its lowest level in a week at 92.35, and it had opened the day's trading with a falling price gap at the level of 92.46.

Eyes will focus later in the day on retail sales, which may a 0.5% increase in October, following a 1.9% soar in September. 

The news from Moderna Pharmaceuticals about the positive results from the Covid-19 vaccine trials, the second US pharmaceutical company to announce a vaccine within a week, gave an initial push to risk currencies, adding to the negative pressure on the dollar.

On the other hand, the United States is struggling to contain a second wave of infection, in addition to not expecting the vaccine to be distributed anytime soon, which increases uncertainty in the United States of America and thus negatively affected the levels of the US dollar.

The United States recorded more than a million new cases of Coronavirus last week, according to Reuters data, as several US states, including Michigan, North Dakota and Washington, imposed new restrictions on public gatherings and indoor dining in an attempt to slow the spread of the virus.

On the political front, concerns remained about the rapid transfer of power in Washington, where President-elect Joe Biden said on Monday that "more people may die" from the pandemic if outgoing President Donald Trump continues to block the transition of power.

The euro levels rose to the highest level in a week against the dollar, hitting the highest level at 1.1867, after trading opened today at the level of 1.1846. 

The pound sterling also rose with the expectation of some form of deal between Britain and the European Union, climbing to highest level in four sessions against the dollar at 1.3254.

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