As new variants of COVID-19 emerge rapidly, the world economy is struggling to maintain balance. Nevertheless, our economy is equipped with safe-haven currencies to maintain this balance. The US dollar is one such safe-haven currency facing a one-week low against its fellow safe-haven currencies. As devastating as it may seem, there has been a turn of events where investors are optimistic regardless of the dollar is going down to a one-week low.
Reduced risks of the Omicron variant back this newfound optimistic outlook toward the global economy. The African study – that has not been peer-reviewed or evaluated claims that people infected with Omicron are less likely to be hospitalized. So, even though the dollar goes down to a one-week low, other factors contribute to the buoyant global economy.
Why Are Investors Optimistic About Global Economy Despite Dollar’s One-Week Low?
Investing is a skill that requires a keen eye for numbers and a sense of intuition. Intriguingly, investors are optimistic about the global outlook despite the dollar’s one-week low. The United States authorizing the Pfizer pill has also contributed to the optimistic view. Non-U.S. currency holders also benefited from the dollar’s one-week low as they could purchase gold at relatively low prices. Gold prices had a weekly gain of 0.5%, and although the U.S. economic growth slowed down, it took a sharp turn in 2021 with record performance since 1984.
Is The US Dollar One-Week Low The Right Time To Invest?
The dollar being the safe-haven currency, is facing a one-week low. Nevertheless, investors seem to have resorted to optimism despite the rise in COVID-19 infections. Even though the U.S. dollar has not retained its value, it holds the promise of gaining momentum in the coming months, as expected by many analysts.
The analysts also expect the Federal Reserve to increase its interest rate in March. This move can set the U.S. central bank apart from other safe-haven currencies. Therefore, witnessing the investors’ optimism despite the dollar one-week low seems like the right opportunity for those with a risk appetite.
Consumer Optimism During The US Dollar One-Week Low
Consumer confidence is one of the contributing factors to investors’ optimistic global outlook. In November, the United States released positive U.S. economic data that showed a 1.9% rise in existing home sales. This data was proved right by increasing consumers planning purchases and vacations in the coming six months.
How To Manage Expectations?
The world economy is constantly fluctuating, and new studies daily present information about the COVID-19. It is imperative to be well informed and take calculated risks while investing. The U.S. dollar is a safe-haven currency and is sure to bounce back at the top of the economy.
Despite the one-week low dollar, it is refreshing to the investor’s optimistic global economic outlook. As the African study claims, the omicron variant has reduced hospitalization risk. With consumer confidence soaring, the U.S. economy will thrive in 2022.