As shifts in the international stage continue to influence the global forex trends, market participants are witnessing major fluctuations in key currency pairs. The USD is soaring high as the Euro dips, sparking interest and speculation among traders and investors globally.
The U.S Dollar Index, which measures the greenback’s strength against a basket of six major currencies, recently reached its highest point of the year, driven largely by strong economic data and rising Treasury yields. Concurrently, the Euro, which forms a significant part of the index, has been on a downward trend, creating a stark contrast in the forex market.
This divergence between the two major currencies is attributed to the different trajectories of monetary policies pursued by the U.S. Federal Reserve and the European Central Bank. The Fed has been hinting at hiking interest rates in response to inflationary concerns, which is bullish for the dollar. The ECB, on the other hand, remains
