The US Dollar index (DXY), which traces the American currency against a list of other currencies, has dipped by ~9 per cent since March 2020 highs.
The extent of monetary policy stimulus by the Fed, an increased drowning of USD by other central banks and record low level of interest rates seem to have depreciated the greenback.
Since the end of June 2020, the Chinese currency has strengthened by over 4 per cent against the US dollar, gearing up for the biggest ever quarterly gain since 1981.
The Chinese currency has been going strength to strength on the back of the nation’s solid economic recovery and successful virus containment.
Australian dollar has continued to strengthen against the greenback over the past few months, despite weak macroeconomic fundamentals and second-wave threats.
However, the recent dip in iron ore prices and the RBA’s potential policy options has been putting some sort of pressure on the domestic currency.
Some of the factors that are likely to influence currency market in near term include the US Presidential election, global growth prospects, inclination of monetary authorities towards negative interest rate and vaccine developments.
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