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26.11.202015:00 Forex Analysis & Reviews: How long may USD hold its positions?

Exchange Rates 26.11.2020 analysis

The prospects for the American currency are mixed as the US economic data is bleak. Moreover, the market remains euphoric amid news of the effectiveness of the COVID-19 vaccine. These factors have prompted investors to look at riskier assets associated with global commodities and emerging markets.

Experts are confident that after a sharp fall, the US dollar will recover in the short term. However, some investors argue that the currency will decline in the long term.

Analysts from Mizuho Securities believe that the recovery of the global economy amid the growth of the Chinese economy will have a positive effect on commodity currencies. He is confident that the prospects are good. Thus, emerging market currencies with good fundamentals should benefit.

The British currency hit a two-month high against the US dollar. GBP/USD is trading above $1.33.

Exchange Rates 26.11.2020 analysis

However, the UK has accumulated huge debts of around £400 billion to rebuild the economy from the consequences of coronavirus. In other words, the current budget deficit of the country can be compared with the deficit of the Second World War. Nevertheless, investors are betting on the pound sterling as they are waiting for the trade agreement between the UK and the EU. In the case of successful negotiations, the EUR/GBP pair will rise to the level of 0.88.

EUR/USD is trading at $1.1899. However, the USD/JPY rate changed and now, it is trading at 104.31 yen.

Exchange Rates 26.11.2020 analysis

AUD/USD hit its highest level since the beginning of the autumn, reaching 0.73664. NZD/USD increased to 0.70036. This is the highest level over the past two years. Both currencies are risky because they are closely linked to global commodity trading.

However, the US unemployment data showed that claims for benefits rose more than expected while personal income fell. This could negatively affect the dollar. Economists believe people will start losing jobs again due to tougher restrictions on businesses aimed at halting the spread of coronavirus.

The Fed intends to buy bonds to support economic recovery. It will also negatively affect the US dollar.

The US dollar index, which measures the US dollar against a basket of six major currencies, lost 0.1% to settle at 91.892. Today, the United States celebrates Thanksgiving Day and markets are closed.

There is one more interesting fact, bitcoin failed to break the all-time high of $19,666 set in December 2017. It dropped to $17,895.

Kate Smirnova,
Analytical expert of InstaSpot
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