On Tuesday, February 20, the US dollar has stabilized moving up from the 3-year bottom vs the majors. Yet, the market still fears that higher budget deficit can affect US economy.
US Dollar index was at some 89.7 this morning against the multiyear bottom touched last Friday.
The greenback has been sliding within the past few months on a number of bearish factors that offset the boost coming from increased interest rate in the USA.
Specifically, the American currency is depressed by increasing concerns about the US budget deficit. As it was reported, the deficit is expected to exceed $1 trillion in 2019.
According to the market analysts, lower taxes and higher expenses planned by the US President Donald Trump can overheat economy and lead to an uncontrolled upturn in the inflation rate.
The US dollar-to-yen exchange rate was seen at some 106.76, which is 0.16% up d-o-d. The euro decreased from the record level of $1.2556 recorded last Friday to $1.2386 this morning.
The euro area finance ministers decided on Monday to appoint the Spanis Minister Luis de Guidos as the next Vice President of European Central Bank since the mandate of the current Vice President Victor Constancio will run out in May.
The expectations of ECB's stimulus programme shutdown have been the key driver for the euro since 2017.
At the same time, investors should be careful with euro buying in the near term taking into account political uncertainties in Europe.