The dollar retreats as the week progresses in the forex market, as China continues to give investors more grounds to target the yuan.
It has not been a good week for the Dollar. Beyond investors‘ predictions of a decline in the forex market, the dollar has had to contend with some unexpected factors.
It seems that the projections are for the USD to maintain this behavior.
Dollar Falls from Excess Crude Oil Inventory
Investors flee the dollar for other risky currencies
The U.S. dollar fell against most of the major currencies on Thursday. As the riskier currencies have begun to rise. As global equities and commodities have been reduced in demand for the safe-haven U.S. currency.
Added to this, the recent rise in Chinese stocks, positive figures in European markets, and a situation loaded with uncertainty for the U.S., has caused investors to begin migrating to riskier currencies. Leaving behind the safe haven they considered the Dollar.
China’s yuan rose to a four-month high against the dollar. Extending recent gains, as investors increased positions in Chinese stocks. As the growing signs of a recovery in the world’s second largest economy provide great expectations.
George Saravelos, a currency analyst at Deutsche Bank, said in a note to clients that he expects the dollar to weaken further due to negative U.S. macro-data surprises.
„The election of the United States is another driver, and we have argued that a Biden victory would be negative for the dollar because policy would move away from tariff policy.
George Saravelos, currency analyst at Deutsche Bank
The Dollar is retreating, and Forex analysts expect it to continue to do so.
Gold and Bitcoin on the Rise: Safe Haven for Investors
With the rise of Chinese stocks and the increase in risky investments in the Forex market, Bitcoin and gold stand out as reserve assets. Therefore, investors need to protect the value of their savings and transactions in these times of great events.
As you know, Bitcoin and gold have a relationship that is not directly proportional to the performance of the financial markets. In other words, even though the markets are collapsing, Bitcoin and gold will not.
Thus, with the risky investment environment in the currency market, and a week having passed, it has caused investors to watch their steps again.
So, the positions of the risky currencies continue to rise. And even more so in China. For example, China’s Crypto Cash A50 index reached record highs for the week.
Weighing that issue against the economic data is the smartest thing to do. And it is the key to investing in the Forex market and in the crypto ecosystem right now.
Well, this volatility will be reflected in Bitcoin’s own movements, currencies, and even gold.
In addition, as the tense situation in the U.S. continues and becomes more complicated, as the presidential election primaries will increase the weight of the situation on the dollar, investors will need to watch their assets. And Bitcoin and the dollar are their safe haven.