In the early European trading session, the trading price of the US dollar (USD) recorded a drop. It was the early trading session in the region that saw a dip in the trading price of the USD.
The dip was mainly due to the growing risks surrounding the United States dollar and the weakening sentiments of the investors.
USD Weakens while GBP Retains Strength
In the latest trading session, the USD has seen a decline in its value. On the other hand, the value of the GBP has recorded a rise.
The GBP has successfully defended its strong position versus the USD. The reason for the GBP’s strength is the recent decision made by the government of the United Kingdom.
Given the growing concerns over the rising inflation in the country, the United Kingdom had to make some difficult decisions.
The biggest decision for the government was to come up with a better solution to the issue at hand. Therefore, the government of the United Kingdom decided to take a U-turn in terms of its policy to deal with the rising inflation rates.
The dollar index, which is the tracker for the performance of the USD against the basket of major (six) currencies around the world has recorded a decline.
In the latest trading session, the DXY reportedly plummeted by 0.5% against the six basket currencies. The overall value of the DXY versus the currencies has been 111.145.
This is the two-week low price that has been recorded for the USD against the basket of currencies.
Traders are Worried
The traders interested in the USD are wondering what is going to happen with the trading price of the greenback.
The economy of the United States as well as the entire world has started experiencing a slowdown. This is not a good sign and as a result, the traders are worried about what is going to happen with the USD’s price.
The traders want to know if the United States would also reconsider making changes to the policy that is in place to control the rising inflation rates.
The major concern is among the traders in regard to the hike in interest rates. They want to know if the Feds would go back on their policy to hike the interest rates to control the rising inflation rates.
The yields from the bonds issued by the government have also experienced a dip in the last week, which is also not a good sign for the USD.
The 10-year Treasury Yields have recently recorded a 5 bps drop, currently standing at 3.60%. The 2-year Treasury Yields have also recorded a drop of 7bps, bringing the overall yields to 4.03%.
The value of the GBP/USD has reportedly surged by 0.5%, currently trading at $1.1375.