- USD Continues to Show Strength
- Euro Trying to Regain Parity
- Stock Futures Move Higher
The US Dollar forex market remains extremely strong heading into the middle of the week as the US Dollar Index moves back higher following a dip yesterday. The Index which charts Dollar strength had previously ended a multiple-day winning run. At the same time, the Euro and Pound are battling to regain some traction from some of their lowest points in recent memory against the Dollar. On Wall Street, markets are also trending positively in the early hours on the back of a challenging start to the week.
USD Strength Continues to Dominate Market
The USD has long been the currency of choice for those in forex trading when market conditions become challenging and in difficult times. This position as a safe haven asset is coming to the front again for the Dollar as can be seen from the current prolonged period of strength. The currency had dipped slightly to begin the week, but with key data to come later in the day, particularly around housing, the Dollar Index is moving higher again.
The USD Index tracks the strength of the currency against a basket of other major currencies in the market including the Pound, Euro, and others. These other major currencies have consistently struggled to gain any momentum in recent weeks and months as the Dollar remains the most stable home for cautious investors. This again proved true in the early hours of the European trading session as the index gained ground to reverse the previous day’s move.
Challenge For Position Continues as Euro Dips
On the other side of the Atlantic, it has been noted by forex brokers and traders alike in the market, that the Euro is enduring a torrid time. Having dropped below parity against the Dollar at the back end of last week, the first time this has occurred in many years, the common currency is still battling to regain this level.
At the time of writing, the Euro is trading around 0.995, slightly up from its Tuesday low of 0.99 which marked a new two-decade low for the pair. Geopolitics and inflation concerns are all shouldering blame as the Euro battles to get back on level terms at the very least.
Stocks Improving Despite Recession Fears
Equities remain in choppy territory although markets on Wall Street are slightly higher to start the day. This comes off the back of a three-day negative run across the board and with recession fears gathering some momentum around the street.
Figures released today show that home prices in the US fell for the first time in three years last month even though demand for mortgages remains high despite increased rates. Sales of previously owned homes dropped 6% in July as investors take shelter in what many feel could still be a treacherous market with the Fed policy of rate hikes remaining.