The movement of the US dollar was slightly disrupted on Wednesday as the outlook for managers ’purchases from Britain and Europe was better than expected. The decision has to some extent allayed concerns about the third wave of Covid-19 in Europe, rising U.S. tax revenues and tensions between Western countries and China.
European zone business activity unexpectedly recorded an increase this month based on preliminary surveys. Even so, most European countries are facing a third wave of Covid-19 infections and ‘lockdown’ measures are likely to be tightened.
In Europe, manufacturing activity in Germany surged higher, supported by rising output and increased sales to Asia (particularly China), Europe and the United States. At the same time, French business and manufacturing activity was seen to be stronger than expected in March.
The IHS Markit lightning composite PMI, seen as a good guide to economic health, rose above the 50 level with a reading of 52.5 in March. However, the Euro declined again after rising slightly to 1.1820. The movement of the euro was hampered by fears of a Covid-19 contagion. The pound also suffered a similar fate.
The US dollar index, which measures the greenback against other currencies, strengthened 0.24% to the exchange rate of 92.567 as of 10.15 p.m. Analysts argue the U.S. dollar’s gains at the moment are supported by U.S. growth and national vaccinations.
Janet Yellen and Fed Chief Jerome Powell are scheduled to testify before the Senate Banking Panel later tonight.
