The dollar keeps dropping due to the Fed policy and Donald Trump’s comments

The US dollar keeps dropping against the euro and the British pound. It reached its 2-year record lows and so far there’s no signals of any significant turnover.

The dollar keeps dropping due to the Fed policy and Donald Trump’s comments

While the dollar was approaching the value of 0.9 against the British pound in the end of March, current exchange rate is around $1 against three quarters of the British pound. The dollar continues to lose against the euro. Even though it could reach parity with the dollar at the turn of March and April, $1 is currently worth only €0.84

Both European currencies are supported by comments of the US president Donald Trump, whose remarks are connected to postponing November elections due to coronavirus pandemic. Trump doesn’t support the idea of voting by mail, which should prevent people from spreading the virus. He claims that elections could be easily manipulated, and therefore should be postponed until they can be handled “safely”. 

Another factor affecting the dollar value is the US central bank policy, which implements zero interest rates and quantitative easing. Last but not least, there’s not much positive data from the labor market. On the contrary, the number of new files for unemployment benefits grew. Until 11th July, there were 30.2 million of Americans applying for the benefit. According to analysts, it’s a sign that the US economic recovery “got tired”.

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