During Thursday’s European session, the US dollar index (DXY) hit the lows of November last year. On the 11th of November, 2016, at the time of the US presidential election, the dollar collapsed against all other currencies. The UD dollar index fell to 95.88. Once the election results had become clear, traders moved to close their short positions on the dollar, which led to large-scale consolidation across the market.
At the ECB forum in Portugal, the heads of central banks have induced rallies for the euro, pound and Canadian dollar. The effect of their statements has extended to Thursday. In the European session, the dollar index fell to 96.68. The euro/dollar rose to 1.1435, while the pound/dollar grew to 1.3007.
At the time of writing, the pound is trading against the dollar at 1.2966 (+0.35%), while the euro is trading at 1.1412 (+0.32%). The American dollar is trying to correct, relying on technical factors. So far, it’s managed to gain some ground against the Japanese yen and Kiwi dollar.
The euro/dollar pair is being supported by 1.1396 and 1.1385 levels. Buyers will try with all their might to take the price up from here, or else a break of the latter level would strengthen the correction.
The euro/pound cross is trading down since Mark Carney’s comments on revisiting the possibility of a rate hike. It’s important to keep an eye on this given that any correctional growth could prompt euro-bulls towards opening new positions on the euro as well as push the euro/dollar up to 1.1455/60.