With the yen, yuan, and euro struggling to recover from the adverse economic impact of the ongoing global pandemic situation, the US dollar continues to look promising to investors. This despite the fact that President Trump’s administration is yet to come up with a plan to fuel a slowly recovering manufacturing sector and create more employment, even as the US national data pertaining to these are awaited.
Globally, the economy experienced an 11-year low during April this year, with some recovery starting mid of May that continued till the end of June.
The euro remains sidelined even as the European Union awaits data related to manufacturing, retail, trading, and unemployment from Germany. The yen yielded but recovered amid Japan’s speculated plan to announce a state of emergency in response to the pandemic. The pound showed a slight decline on Tuesday, owing to the ongoing Brexit issues. The yuan remained mostly unchanged despite political tensions between Beijing and Hong Kong.
Investors concerned with the trade deficit caused by President Trump’s stance against China, consider the move by the People’s Bank of China to reduce funding cost on small firms, a ray of hope. But in the wake of fresh military tensions with India and declining support from Pakistan, which faces a steep financial crisis in the near future, Chinese economic strategies are speculated to return only short-term advantages.
Most other currencies of the world, including the Australian dollar and the Swiss franc, did not perform as expected. Even with signs of recovery, investors are wary of a possible downward economic rebound if the US, China, and the EU fail to reduce their trust deficit with emerging economies such as India.