A closely followed gauge of the U.S. dollar fell to a two-year low Monday, as the currency lost ground to major rivals. The ICE U.S. Dollar Index , which tracks the greenback against a basket of six major rivals, was down 0.7% at 93.807, after trading at its lowest intraday level since July 2018, according to FactSet. The dollar surged to a three-year high in March as the near-shutdown of the global economy triggered financial market turmoil and a scramble for the U.S. currency. The dollar subsequently retreated as equity markets recovered and central banks and governments responded with stimulus measures. The decline for the dollar accelerated in recent weeks on a rise in coronavirus cases in the U.S. and indications of a pickup in global economic activity. The euro has rallied strongly versus the dollar, getting an added lift last week as European leaders agreed on a substantial package of grants and loans aimed at easing the pandemic blow in the region's hardest hit countries. The euro was up 0.6% at $1.1725 after trading at its highest level versus the dollar since September 2018.
The U.S. reported on Thursday its first rise in employment claims since March, largely as a result of a number of populous states having to roll back reopenings because of the pandemic. “High frequency data already pointed to a stalling of the US recovery in recent weeks,” said analysts at Danske Bank, in a research note. “July's U.S. PMIs confirmed this picture with the services PMI showing further improvement but remaining in contraction territory in contrast to its European counterpart.”