FOREX
The US dollar index reached a two-month high during early Thursday trading. The index measures the greenback's performance in relation to a basket of other major currencies, and its climb reflects the growing appeal of the dollar in the face of the uncertainty generated by the stand-off in the debt ceiling negotiations. The haven status of the dollar means that, almost paradoxically, the country's currency is seeing greater demand as the risk of a US sovereign default rises. This scenario was exacerbated by the decision of the credit rating agency, Fitch, to place the United States on watch for a potential downgrade from its AAA status. The agency justified the decision with the growing risk that an agreement to lift the debt ceiling is not reached before early June, when the Treasury is expected to run out of money. Against this background, with no resolution in view for the impasse in the negotiations, there may be scope for further dollar gains in the run-up to the weekend.
Ricardo Evangelista – Senior Analyst, ActivTrades
The information provided does not constitute investment research. The material has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and as such is to be considered to be a marketing communication.
All information has been prepared by ActivTrades (“AT”). The information does not contain a record of AT’s prices, or an offer of or solicitation for a transaction in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information.
Any material provided does not have regard to the specific investment objective and financial situation of any person who may receive it. Past performance is not a reliable indicator of future performance. AT provides an execution-only service. Consequently, any person acting on the information provided does so at their own risk.