As the divergence among the world’s central banks has been halted, at least for the time being, the beneficiary is the US Dollar. The greenback recovered lost ground after last week’s fall when Federal Reserve Bank announced it would delay an interest rate hike. Now, investors must attempt to assess whether the Fed’s peers, specifically the Bank of Japan and the European Central Bank, might need to provide additional stimulus for their own torpid economies. The US Dollar Index, which tracks the greenback against a weighted basket of peers, was trading significantly higher than it did last Friday, after the Fed announcement.
As reported at 11:56 am (BDT) in London, the US Dollar Index was trading at 95.307 .DXY, a gain of 0.44% and well above last Friday’s trough set at 94.063 .DXY. The USD/JPY was up at 120.33 Yen, a gain of 0.17% while the EUR/USD was lower at $1.1285, down 0.01%.
Euro on the Backfoot
The Euro remains under pressure in the wake of the Greek election results which surprisingly put Alex Tsipras back at the helm. Over the weekend, the ECB’s chief economist also made comments which put the Euro on the defensive, saying that the central bank was ready to provide further accommodations as and when the economic situation becomes turbulent enough to merit further action.