The dollar strengthened throughout the course of yesterday against the pound, euro and other currencies due to its status as a ‘safe-haven’ currency.
The USD tends to benefit when market sentiment falls, so growing concerns about COVID-19, reports of economic slowdown in Asia and the escalating crisis in Afghanistan have given the currency a boost.
This comes despite poor retail sales data for the US, which was released yesterday. US retail trade fell 1.1% from a month earlier in July, following a 0.7% growth in June. This was worse than market expectations and reflects a resurgence in COVID-19 cases hitting consumer demand.
The Federal Reserve will release the minutes from their latest meeting this evening and the markets will be listening closely for comments about tapering monetary policy.
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