The US Dollar is trading in lower ranges against its G10 peers this morning as Traders weigh geopolitical risk and policy uncertainty.
Unpredictable politics are unmistakably Dollar negative, but the last week has proven just how heavily it can weigh on the currency. Traders are rushing to hedge their exposure to a volatile political landscape by betting against the Dollar and are paying the highest premiums in over a decade to do so. Should that trend continue, the Dollar could hit its lowest level in four years.
Gold topped $5,000 an ounce yesterday, and could continue its run as Traders, primarily from central banks and sovereign wealth funds, slash their Dollar-denominated holdings and rotate into precious metals for protection against debasement amid uncertainty. Additionally, the risk of another government shutdown is looming as Democrats threaten to withdraw support from the current funding package should Republicans not withdraw funding for the Department of Homeland Security.
What to Watch This Week…
- Monex USA Online is always open
EUR ⇑
The Euro is up against the Buck this morning, having strengthened to its highest level since June 2021. The move is driven largely by broad USD weakness and Traders piling into the Euro as a safe-haven (when compared to the Dollar). These are very compelling levels for corporates to lock in hedges for the repatriation of their Euros into Dollars.
