Thursday ended with the EUR/USD being high above of local resistance of 1.10. What's the target now?
Common currency dives on Italy woes
On Tuesday, the common currency went down in the face of new worries over Italy's fiscal issues. Meanwhile, the safe haven Japanese yen managed to rally because the boost to risk appetite from the re-negotiated NAFTA deal receded.
The currency pair EUR/USD slipped by 0.41% being worth 1.1530, which is the lowest value since September 10.
The slip in the common currency showed up after head of the lower house's budget committee, Claudio Borghi told that Italy would have tackled its fiscal issues with its own currency.
The comments contributed to a clash with the European bloc over the populist government’s budget proposal seeking to ramp up spending and reduce taxes, although would increase Italy's debt and also have EU budget rules breached.
The common currency slumped versus the Japanese yen. The currency pair EUR/JPY lost 0.58% trading at 131.14.
The evergreen buck slumped from 10-month maximums versus the Japanese currency. The currency pair USD/JPY lost 0.15% trading at 113.75.
The Japanese yen was backed because market sentiment from a fresh update of the North American Free Trade Agreement actually faded. Experts are afraid that the current US presidential administration is going to take a harder line in its trade stance against China, utilizing trade deals with Mexico, South Korea, and Canada as leverage.
Tracking the evergreen buck’s purchasing potential versus a number of its key rivals the USD index surged by up to 0.28% trading at 95.19, which is the highest result since September 12.
The UK currency slipped. The currency pair GBP/USD slid by 0.43% trading at 1.2985 due to the fact that market participants were still pessimistic about prospects for Brexit talks between the European Union and the United Kingdom.
The Australian dollar declined. The currency pair AUD/USD declined 0.54% being worth 0.7186 after Australia’s major financial institution left interest rates intact at record minimums overnight, in what was a widely anticipated move.
The EUR made a significant rise on the news of the stimulus expansion. Will it last long?
April seasonal patterns weren’t supposed to work, but somehow they did. Even a strong fundamental issue such as the global recession amid the coronavirus couldn’t overwhelm it. That’s why May seasonal patterns may work as well.
S&P 500 skyrocketed to the all-time high on optimism that Biden’s fiscal stimulus will support economic growth and boost corporate earnings.
PMI reports from the EU, the UK, and the USA will be released during the day!
The European Central Bank will publish the monetary policy statement with the interest rate decision on January 21, at 14:45 MT time.