The US dollar continued to climb higher in the European session as market focus focused on the monetary policy announcements of the European Central Bank and Canada.
Federal Reserve policymaker James Bullard’s hawkish remarks drove the greenback higher after he said the central bank should continue plans to reduce asset purchases this year despite weak jobs data last month.
Moreover, the US dollar also grabbed investor demand as a safe-haven as cases of Covid-19 infection increased and its impact on global growth prospects has worsened market sentiment, causing investors to be more cautious in placing positions on major currencies.
The dollar index that measures the strength of the greenback dollar against a basket of major currencies traded up at 92.70.
Meanwhile, the euro plunged lower, weighed down by the strengthening US dollar and investor vigilance ahead of the ECB policy meeting on Thursday.
The pound continued to depreciate amid a strengthening US dollar, with market focus now shifting to a vote on UK Prime Minister Boris Johnson’s tax proposal today.
Earlier, PM Johnson had announced plans to raise taxes in an effort to fund health care and reform the country’s social care system. This increase would increase the overall tax burden to the highest since the second world war.
The outcome of the Reserve Bank of Australia (RBA) policy meeting continued to put Aussie dollar trading under pressure, prompting the major currency to continue to fall lower in the European session.
