By Peter Nurse
The dollar decreased at the beginning of the european session on Wednesday, the riskier assets are in demand as investors are looking for more fiscal stimulus in a context of signs of global economic recovery.
At 10: 30 am, the u.s. dollar index, which tracks the greenback against a basket of six other currencies, was $ 97,420, down 0.3%, returning to levels last seen in mid-march. USD/JPY remained virtually unchanged at 108,70.
EUR/USD rose 0.4% to 1,1212, trading above 1.12 for the first time since mid-march, in the hope that policy makers will continue to support the euro zone, despite the failure of the German government to agree on a second stimulus plan on Tuesday. The weaker economies of the region are still struggling to recover from the measures used to combat the epidemic of coronavirus, even if the progressive reopening of the european economy continued Wednesday, Italy has lifted its regulatory quarantine for visitors.
The european central Bank should increase its purchase program of the emergency in the event of a pandemic of 750 billion euros, on Thursday, probably about 500 billion euros.
The pound sterling also posted gains against the u.s. dollar, up 0.3% to 1,2586, after rising above $ 1.26 for the first time since mid-April, in sympathy with the rally in stock prices worldwide in a context of constant improvement in investor sentiment regarding the global release of the containment.
That said, the Uk and the EU appear to be still far from a solution to prevent a major disruption of trade after the end of the transition period post-Brexit at the end of the year. The two parties have started this week their latest interviews is being planned on the question, and doubts remain about the likelihood of progress.
Earlier Wednesday, data showed that the services sector of china has returned to growth last month for the first time since January.
USD/CNY rose 0.1% to 7,1089, but still below 7,17 observed at the end of last week, while tensions between the United States and China were at their peak.
In addition, the australian dollar, often seen as a bet indirectly on the strength of the chinese economy, increased by 0.2% to reach 0,6905$, reaching its highest level in five months against the greenback, despite the fall of 0.3% in the GDP of the country during the first quarter of 2020, a second contraction in three consecutive quarters.
