The exchange rate of the US dollar (USD) dropped and according to the US Dollar Currency Index (DXY), in the short-term assessment, it is now the lowest since 5 May of this year. Thus, according to analysts and foreign exchange market financial strategists, the exchange rate of the USD is currently at a two-week low. However, the USD continues to hold firm as the global currency and according to these experts it is only a slight decline.
The domestic currency of the USA, which also serves as one of the key major currencies in the world along with the function of the global commodity currency, namely the US dollar fell against the single European currency, the euro (EUR) but also against the Japanese Yen (JPY) and Swiss Franc (CHF). Commodity market took advantage of this decline, with the value of gold strengthening. On 20 May 2022, at 6:26 am CET, investment gold traded on the Commodities Exchange Center (COMEX) commodity market at US$ 1,841.50 per troy ounce with the current daily strengthening by +0.0163%.
On Friday, 20 May 2022, at 6:38 am CET, the US Dollar Currency Index, which compares the exchange rate of the USD with the other six major world currencies, saw the USD at a price level of 102.94 with the current daily strengthening by +0.21%. At the time mentioned, the USD traded against CHF at a mutual exchange rate of CHF 0.971 per USD, with the USD declining by -0.236% against the CHF. The JPY also appreciated against the USD with the USD/JPY currency pair trading at JPY 127.67 per USD, with the USD declining by -0.102% against the JPY. However, the EUR/USD global currency pair was not affected by the USD’s decline, and during Friday morning the EUR continued to lose against the USD as the currency pair traded at US$ 1.057 per EUR with the daily strengthening of the USD by +0.132% against the EUR.
According to analysts and financial market strategists, investors should definitely not rely on and base their trading strategies on the excessive decline of the USD. According to these experts, the current decline in the USD is partly due to the current considerable volatility of global financial markets, which has exacerbated market tensions and concerns regarding investment risk. It is for these reasons that these experts attribute the growth of currencies such as CHF or JPY, when investors’ interest in these currencies, as save havens, increases. Investors and traders tend to turn to these currencies in times of market stress. “Yes, the dollar is broadly lower today despite risk-off conditions in the cross-asset space, but does this mean the dollar’s haven status is starting to weaken? Most probably not,” said Simon Harvey, head of FX Analysis at Monex Europe.