US Dollar has been falling from 1 June to date and it has been affected by a few factors. The greenback is considered as a strong currency but right now we can see it is falling against weak currencies, commodities, metals and stocks. Let’s take a look and see why it is falling.
Why led to its fall?
- Unemployment decrease
- OPEC oil cut deal
On the last announcement of the Non-Farm Payroll, the employment status changed as it was seen that about 2.5 million jobs were created and that move affected the US economy, it was a symbol that it rebounded. The industries were now open and fully functional and jobs were created.
With that development 2 birds were killed with one stone because since industries were open stocks rise and people who had previously liquidated their stock positions reinvested again and the greenback lost its ground and fell as people were now investing in stocks, we saw AAPL and TESLA trading at its all-time high and this led to a rise in the Tech Industry.
OPEC oil cut deal
A few weeks ago Oil fell hard and later rebounded. OPEC had to cut the oil production to create demand so that the price of oil will rise and it happened then a few days ago the oil deal cut was extended for another month and the price s of oil further increased and since the Canadian dollar is backed by Oil, this strengthened the CAD and weakened the USD.
What saved the Greenback?
On the closing day of the market on 10 June 2020 after the FOMC there were signs of life on the US Dollar after it was decided to maintain interest rates at 0.25% just like on the previous date and with that decision the US currency surged and recovered against other major currencies the following day and on the opening of the markets on 15/05 it is expected to keep on soaring