The US dollar took the top spot of the currency markets this week, outperforming the Euro and Chinese yuan. The DXY index, which tracks the USD’s performance, shows the currency touching 103.10 on Tuesday’s opening bell. The USD is now at a 10-week high as traders bet on a moderate interest rate cut by the Federal Reserve.
Also Read: BRICS Advances ‘Multicurrency System’ To Break US Dollar Dominance
The Chinese yuan dipped against the US dollar after China’s weekend stimulus announcements disappointed currency and forex investors. China’s fiscal stimulus briefing received mixed responses as the package from the central bank failed at monetary easing. It also failed to reduce economic inflation and fell short of expectations among the investors’ community.
Inflation in China grew 0.4%, while it is on a decline in the US at 2.3%. In addition, production in China dipped 2.8%, marking the 24th consecutive month of decline. All these developments bolstered the US dollar to a high while the Chinese yuan experienced a decline.
Also Read: XRP Expected to Rise: Analysts Predict $0.75 Soon
Currency: The US Dollar Beats the Chinese Yuan & the Euro
Apart from the Chinese yuan, the US dollar outpaced the Euro in the currency markets this month. The Euro fell ahead of the European Central Bank (ECB) meeting as expectations of a rate cut sparked a dip. Trades hold high expectations on the ECB meeting as they are set for a third interest rate cut this year.
Also Read: MicroStrategy Stock Rises 550% in 2024: Should You Invest?
Both the Euro and the Chinese yuan look gloomy against the US dollar, making currency investors open long positions in the USD. If the USD holds on to the positive momentum, the next leg could be 103.50 by the end of October.
If the upcoming US jobs data shows employment numbers above 240,000, the dollar has more chance of touching 104. However, if the jobs data falls below 120,000, trouble could brew in the overall US economy.