This trading week has been lucky for dollar bulls. Demand for the US currency is growing day by day thanks to its safe haven status and upbeat macroeconomic data on the US economy. The US dollar index has nearly approached the resistance level of 100 points. The greenback is holding the upper hand over the yen. The currency pair has tested 112. Market participants are wondering how long the US dollar is going to extend its steady rally and what peaks are yet to be conquered. Traders cheered a report on producer prices in the US. The US construction sector also revealed positive trends. The minutes of the latest Fed’s policy meeting again indicated that the domestic economy does not need monetary stimulus. Besides, several Fed officials did not voice concerns in their remarks about an adverse impact of the coronavirus on the global economy. This gave fresh impetus to the US dollar which has hit the highest level in three years. Today, the greenback is extending its advance. On Thursday, its index has inched up 0.14% to trade at 99.83. Market participants share the viewpoint that such a stellar rally will be inevitably followed by a correctional decline. Meanwhile, the dollar/yen pair is displaying interesting market moves. The currency pair spiked amid the firm US dollar and the weakening yen. Demand for the yen is waning on the back of mounting appetite for risk. Today China’s authorities reported on a notable decline in the number of news cases. Moreover, demand for safe haven assets undermined China’s plans to take drastic measures to safeguard local companies hurt by the virus outbreak. The dollar/yen pair tested the level of 112,
but it did not stay there for long. The buyers do not rule out that the pair will encounter resistance at 113.8. Nevertheless, some analysts predict that the dollar/yen pair will halt its rise at 112. The yen is unlikely to lose ground a lot. Indeed, the coronavirus epidemic has not been contained yet. The presidential election in the US is scheduled for this year. The Canadian dollar is getting weaker, even though yesterday’s data on consumer inflation beat the forecast. Oil prices have climbed more than 2%. Despite the positive factors, the loonie has been weighed down by the broad-based strength of the US dollar. Today the USD/CAD pair settled up at 1.3262. Traders are evaluating new macroeconomic data from the US and Canada. The euro/dollar pair is trading mainly flat at around the level of 1.7. Experts downgrade forecasts on the single European currency. It is set to drop to lower levels. On Friday, Markit research group is due to release a series of PMIs for the US and the eurozone.