On Monday the Dollar gained in choppy trading, with the euro languishing below $1.18 and commodity currencies falling, as the currency drew some safe-haven bids on concern about the potential fallout of a hedge fund’s default on margin calls.
The dollar index, a measure of the greenback’s value against six other major currencies, hit as high as 92,919, its strongest level since November last year. It was last marginally up at 92.825.
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U.S stocks trade lower after global banks said they faced potential losses from a hedge fund’s default, identified as Archegos Capital, which analysts said was tied to big U.S. media and Chinese tech companies.
”Focus today in on how U.S equities perform, especially given the hedge fund default that came out last week,” said Simon Harvey, senior FX market analyst at Monex Europe in London.
The euro, meanwhile, struggled on Monday as the prospect of tougher coronavirus curbs in France and Germany dimmed the short-term outlook for the European economy.
”The U.S. economy is much stronger and miles ahead in the immunization game compared to Europe’s and Japan’s and this ultimately translates into the Fed normalizing policy years before the ECB or the BoJ,” said Marios Hadjikyriacos, a strategist at brokerage XM.