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The dollar drops a little, the post-Trump transition begins

24/11/2020
Source : boursorama.com
Categories: Index/Markets

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The dollar and other safe havens fell in a market reassured by incumbent US President Donald Trump, who agreed to start the transfer of power to Joe Biden.

Around 10:10 a.m. GMT (11:10 a.m. in Paris), the dollar lost 0.35% against the euro, at 1.1882 dollars for one euro, and 0.31% against the British pound, at 1.3363 dollars for one pound. .

The dollar is perceived by some investors as a safe haven, and traders therefore sell it when uncertainty rises.

Another great safe haven, gold lost 0.82% to 1,822.75 dollars, after hitting 0300 GMT at 1,821.37 dollars, its lowest level in four months.

Even though Mr. Trump has promised on Twitter to pursue a "fair fight" in court, his decision to let the transition begin "eliminates the risk for the market", judge Neil Wilson, analyst at Markets.com.

In addition, Joe Biden has selected Janet Yellen, the former president of the American Federal Reserve (Fed), to lead the Treasury.

"This decision creates the prospect of greater harmony between (the Treasury and the Fed) and helps ensure the coordination of fiscal and monetary stimulus measures", which could lead to a drop in the dollar, commented Ricardo Evangelista, analyst at ActivTrades.

“Janet Yellen is appreciated by the markets, she had not been very aggressive at the Fed” by limiting rate hikes, said Mr. Wilson.

Faced with these prospects, the dollar index, which compares the greenback to other major currencies, fell on Tuesday. Since the beginning of the month, it has lost nearly 2%, and is approaching its lowest point for the year, reached at the beginning of September.

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