Currencies Overview: Dollar Falls as Demand For Safe Haven Dwindles Due to The Rise in Asian Stocks

The safe-haven dollar weakened on Monday, February 1 st as risk sentiment improved thanks to hopes that retail investors who targeted hedge funds last week turned their sights elsewhere.

The US currency fell against most of its counterparts, as Asian stocks rose after four-day losses. The Australian dollar offered the highest risk, and so did the British pound.

Earlier, the US currency received support as traders remained concerned that individual investors who organized themselves online may continue their attack on the debtor position of hedge funds, which raises more volatility, but it appears that the crowd focus has shifted directly to silver.

Some are concerned that the extreme volatility in GameStop and other stocks may herald a correction in the market.

The controversy over the size of the stimulus package proposed by President Joe Biden and the delay in distributing anti-Coronavirus vaccines also provide reasons for caution.

A group of Republican senators appealed to Biden, who is affiliated with the Democrats, to reduce his proposed package to substantially mitigate the repercussions of the $ 1.9 trillion pandemic, proposing instead a figure of $ 600 billion.

The dollar index fell 0.1% to 90.534 today in Asia, after it had achieved a gain of 0.5% last week.

The index has been moving within a limited range in recent weeks to a large extent, after rising from its lowest level in nearly three years at 89.206 at the beginning of the year.

The Australian dollar added 0.2% to 76.57 US cents, to offset earlier losses due to new indications of a weak recovery in China, the main customer for Australian commodities. Data showed that the recovery of factory activities in China slowed in January as it was hampered by a wave of infections with the Coronavirus.

For his part, the sterling jumped 0.4% to $ 1.3739, approaching the highest level in two and a half years of $ 1.3759, which it hit last week.

The euro fell 0.1% to $ 1.2185, and continues to fluctuate in a narrow range.

The dollar fell 0.1% to 104.655 yen, retreating from a two-and-a-half-month high of 104.94 that it touched on Friday.