Last week, which turned out to be largely a failure for the USD, was not in vain for the dollar. The indicated currency gathered its strength and began to move upward after drawing the appropriate conclusions. According to analysts, this trend will continue in the near future.
The efforts of the US currency has been successful – it regained confidence by joining the competition with the European currency. In anticipation of the meeting of the US Federal Reserve and the publication of the semi-annual report, the dollar in the EUR/USD pair gained a second wind. On the morning of Tuesday, June 16, the EUR/USD pair advanced to high positions, to the levels of 1.1342 - 1.1343, but then slightly dropped. To date, the classic pair moves around the levels of 1.1337-1.1338.
According to experts, the US currency in the current situation is able to gain strength and is getting powerful by strengthening its influence in the financial markets. At the same time, analysts say that the dollar bulls may be the losers. A difficult epidemiological situation is playing against them, associated with the high probability of the second wave of the COVID-19 pandemic. However, for the dollar, another outbreak of the epidemic could be on hand, provoking an explosion of interest in protective assets.
The US currency received support after a recent meeting of the US Federal Reserve, although some investors were counting on a rally of risky assets and a decline in interest in safe haven currencies. However, this did not happen. The Federal Reserve partially cooled the excessive optimism of the market, forcing investors to take a break to analyze the situation. According to Bank of America analysts, the actions of the Federal Reserve will lead to the dollar's further correction, recorded after the meeting of the regulator. It can be recalled that it contributed to the active rise of the dollar index to 97.13, which previously could not jump over the low of 95.72. To date, the value of USDX is 96.55, while Bank of America strategists are confident in its further increase. They expect the indicator to stabilize near the trend line - around 1200 points, which is a favorable signal for dollar bulls.
Previously, the Federal Reserve published a document in which it focused on the current state of affairs in the American economy. Jerome Powell, the head of the regulator, expressed concern once again about the slow pace of economic recovery in the United States after the outbreak of COVID-19 and announced state support for small businesses. According to experts, questions of additional state assistance to the sectors most affected by the pandemic will be raised at today's meeting of the Fed. In such a situation, the US currency can count on additional incentives for growth, which will give strength to the USD again.
According to experts, there are still barriers that can prevent the dollar from going up in the short term, especially the second wave of COVID-19. On the contrary, the dollar is able to climb on its crest and get the most out of a difficult situation and not every currency can boast of such actions. Therefore, the dollar has no worthy competitors, except the euro. Experts are counting on the further rise of the US currency, who has already been trained to fight for the victory to the end.
