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30 May 2024
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US Dollar Crashes To 104 But Currency Traders Are Buying the Dip

The US dollar crashed during the trading hours on Wednesday falling to a low of 104.22 in the DXY index. The USD had touched a high of 107 in Q2 this year but relentlessly dipped since last month with no recovery in sight. It is now facing stiff competition with leading local currencies that are looking to get stronger in the forex markets.

Also Read: Nvidia Stock Prediction: What Will Its Price Be in 2025?

us dollar dxy index 104.22
Source: MarketWatch

However, despite the dip, currency traders have not abandoned the US dollar and are accumulating it at every level. The move is adding pressure on local currencies as investors are not finding their prospects lucrative despite the rise. This isn’t the first time that currency traders are betting big on the US dollar, even during the dip in March this year, accumulation was at an all-time high.

Also Read: Chinese Yuan Will Never Outpace The US Dollar, Analyst Predicts

The move cements the resistance level of the US dollar giving it strength to bounce back harder during a recovery. It also makes investors’ portfolios swell with profits as they accumulate the currency at its lowest price point. No other local currency is experiencing this level of accumulation during the dip.

Currency Markets: Why Is The US Dollar Falling This Month?

us dollar usd currency bill
Source: kahawatungu.com

The first nail that hit the US dollar’s prospects this month was the jobs data released by the Labor Department. Employers in the US created fewer jobs than anticipated leading to the weakening of the USD. While the expectation was 243,000 jobs, the labor market could create only 175,000 job openings.

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That’s a steep decline indicating that the labor market could become weaker affecting the prospects of the US markets. In addition, the latest CPI data added another blow to the US dollar as retail sales numbers came out flat. The retail sales missed by 4/10 of a percent and traders are hoping that the Feds would cut rates again. 

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