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Dollar Forex Market Remains Strong Despite Dip

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  • Slightly Weaker Dollar Remains Safe Haven of Choice
  • Pound and Euro Both Struggling 
  • Stock Turmoil Continues Amid Risk Aversion

The Dollar forex market continued to steamroll ahead against most other major foreign currencies at the end of last week. Despite some small signs of weakness on Monday, the currency remains extremely strong against the Euro, Pound, and others in the face of continuing Russian aggression in Ukraine. There is little either the Euro or Pound can do with both struggling under the weight of the US Dollar and its status as a safe-haven asset. Meanwhile, the turbulence continues on Wall Street with Monday seeing more largescale sell-offs as traders move into more cautious assets. 

Dollar Dips But Remains Extremely Strong

Monday brought a slight dip in the Dollar although this is not anywhere close to signaling an end to the continuing strength of the currency. Particularly in the face of adversity, those forex trading the Dollar have been consistently reminded of its role as a safe haven for investors. This is not a position it seems the greenback will be relinquishing any time soon. 

The US Dollar Index which measures the strength of the currency against a handful of other major global currencies is occupying its highest levels in quite some time above 99.00 as it moved to consolidate on Monday and moving into the rest of the week. With little essential data on the docket for release, it seems that the Dollar will remain at the mercy of the news. This would seem to suggest no compromise is yet close on the issues propelling the currency higher. 

Pressure Mounts on Euro & Pound

Where there is strength on one side, there is pressure on the other. This pressure from the stronger Dollar is being firmly exerted upon both the Pound and the Euro. Both currencies are moving lower on an almost daily basis and struggling to gain any kind of traction with forex brokers. 

The Euro has picked up slightly but still sits well off the 1.09 mark against the Dollar and broadly at a very low point. Sterling has faired little better and is now trapped close to 1.31 and at the lowest point it has seen since the end of 2020 with no near-term improvement likely.

Stocks Again Battered to Begin Week

It has been another tumultuous beginning to the week on Wall Street. Markets were rudderless on Monday as the Russia-Ukraine conflict continued to take a toll on prices and sentiment. Oil prices spiked to a 13-year high above $130 a barrel before settling as the US considered a ban on Russian oil which was met with a similar threat by Russia to cut off their supply of natural gas. 

All the while, the markets suffered. The Dow Jones dropped more than 800 points to continue a losing run which has seen it notch negative session after session. The Nasdaq also shed more than 3% to fall into bear market territory while the S&P 500 had an awful day, its worst since October.

Anthony is a financial journalist and business advisor with several years’ experience writing for some of the most well-known sites in the Forex world. A keen trader turned industry writer, he is currently based in Shanghai with a finger on the pulse of Asia’s biggest markets.