© Reuters.

By Yasin Ebrahim

Investing.com – The dollar looked set to snap a four-session winning streak on Monday, but analysts warn that the path lower for the greenback will run out of road as the Covid-19 pandemic’s lasting impact on the global economy will renew safe-haven demand. 

The , which measures the greenback against a trade-weighted basket of six major currencies, fell by 0.52%, to 97.03. The dollar has fallen nearly 7% from its highs in mid-March.

“As the pandemic sweeps on through Latin America, the global economy isn’t out of the woods yet, and I suspect we need to see the worst of the global picture before we can see a long-term dollar downtrend start properly,” Societe Generale (OTC:) said.

The fall in the dollar on Monday was driven by a “technical correction” following Friday’s rally, led by demand related to option and future expiries, the bank added.

The warning against bearish bets on the greenback comes days after data on Friday, showed the traders increased their net short dollar position, according to calculations by Reuters and U.S. Commodity Futures Trading Commission.

The value of the net short dollar position climbed to $15.69 billion in the week ended June 16, from net shorts of $9.51 billion the previous week.

The dollar was also dragged lower by losses against the pound and euro as risk-on sentiment kept a lid on safe-haven demand.

rose 0.89%, to $1.2466, and , which accounts for about half of the weighting of the dollar index, rose 0.75%, to $1.1258.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

Source link