USD recorded its lowest level in 26 months ahead of consumer spending data
Last Updated on July 31, 2020
EURUSD Forecast & Technical Analysis – 31st July 2020
USD fell on Friday against most major currencies, to continue decline for 3rd day, recording lowest price in 26 months, after comments by President of United States, raised concerns about the presidential elections scheduled for next November, and the largest currency is heading in the world is suffering the largest monthly loss in ten years, and traders awaiting today for economic data from Washington, perhaps the most important of them on levels of consumer spending.
USD index fell by about 0.3% to the level of 92.55 points, the lowest level since May 2018, and trading starts today at 92.82 points and recorded the highest level at 92.85 points.
USD index ended yesterday’s trading down 0.3% after data showed that the US economy entered the second quarter in the worst recession in the history of the United States.
US President Donald Trump said by straining the postponement of the presidential elections so that people can vote in an appropriate, safe and secure manner, which raised doubts about the holding of elections scheduled for next November.
In terms of July transactions, USD index is down by about 5%, in connection with incurring the third monthly loss in a row, and largest monthly loss since September 2010.
Causes of USD decline
The worst monthly loss in ten years is due to many reasons, including investor focus on buying high-risk currencies, growing doubts about world’s largest economy recovering quickly from Coronavirus crisis and Federal Reserve’s assertion of continued economic support to overcome the worst crisis since The Great Depression in the 1930s.
On Wednesday, the US central bank kept interest rates unchanged, according to most expectations, near-zero levels, and reiterated its pledge to reduce the damages caused by the epidemic as Coronavirus cases disrupt the economic recovery.
Federal Reserve will continue to implement bond purchases and a set of lending and liquidity programs that aim to support the economy in face of Coronavirus crisis, and he said that the economy is still far below pre-epidemic levels, and upcoming recovery will largely depend on the capacity and success in controlling the virus.
Investors are awaiting later in the day many economic data in the United States. Perhaps the most important of these data is level of consumer spending, which represents about 70% of the value of the gross domestic product, and which illustrates aggravation of the world’s largest economy as a result of the viral pandemic.
By 12:30 GMT, the personal spending index June month is expected to rise by 5.3% from an increase of 8.2% in May, and personal income index for the same month is expected to decrease by 0.8% from a decrease of 4.2% previous month.
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