XE Market Analysis: Europe – Aug 13, 2020

The dollar is down for a second day, with the narrow trade-weighted USD index printing a six-day low at 93.08 to nearly fully unwind the gains seen in the wake of last Friday’s U.S. July jobs report. Some market narratives have been attributing the dollar’s ebb as being a return of the currency’s inverse correlation with stock market direction, along with the perception that the Fed has strategically dropped its concern about inflation risk, which has driven real U.S. yields into negative territory. These factors appear to be outweighing the improvement in the U.S.