The U.S. dollar (USD) has been under much selling pressure for the entire week. There has been some real outperformance with its peers, taking advantage of the stricken greenback.
The downside for the most liquid currency in the world came on the back of a shift in market tone. At the commence of the week risk appetite was a dominating theme, given there were signs of a possible slowdown in Covid-19 in Europe.
Some of the European Covid-19 hotspots such as; France, Italy and Spain, reported a pace of cases somewhat decreasing. It was enough for markets to take and see the light at the end of the tunnel, as the saying goes.
A decent rally has been seen as thanks to this across the stock indices, in both Europe and the United States.
Additional weight was added to the USD in the session of Thursday, following the U.S. Federal Reserve announcing a broad $2.3 trillion in funding for local governments and small and mid-sized businesses.
It was another way for the central bank pumping money into the markets, flooding the economy again with dollars, diluting the currency.
As mentioned in our prior USD blog, price action broke out of a descending wedge structure/flag, after forming an evening star, inviting greater downside. A clear breach of the psychological 100 mark has also been observed, allowing for further outperformance from the likes of; EUR, GBP, CHF amongst others.
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