Thursday ended with the EUR/USD being high above of local resistance of 1.10. What's the target now?
Common currency slumps on economic surge worries
On Friday, the common currency tumbled approximately 0.5% following signs that economic surge could be decelerating across the European bloc.
Euro zone business surge speeded down much faster than anticipated in November, as follows from a widely-watched Purchasing Managers Index poll.
The downbeat outcomes were hastened by an everlasting US-led trade conflict and it’s going to be the ECB’s concern, which is anticipated to draw a line under the 2.6 billion euro asset buying program already in December.
Meanwhile, German private-sector growth speeded down to its lowest value for four years due to the fact that factories in the EU’s key economy churned out products at a slower tempo.
As for the euro, it went down by 0.4% hitting $1.1402 against the greenback following the polls. Versus the Swiss franc the common currency tumbled by 0.2% trading at 1.1326 francs.
Weakness in the euro backed the evergreen buck that gained 0.3% versus its key rivals, sticking with 96.706.
For the last trading sessions the evergreen buck lost ground. It’s currently rebounding from a 16-month maximum of 97.69 reached in November.
Dollar pessimists are concerned about the tempo of future interest rate lifts by the key US financial institution.
On Thursday, both the common currency and sterling rallied after the European Commission and Great Britain agreed on a draft text, which outlines how their trading relationship will work once the UK has departed from the European bloc.
The UK currency dived by 0.3% reaching $1.2838 having soared by 0.8%.
As for the Norwegian crown, it dived by 0.2% versus the greenback because an overnight sink in crude prices put pressure.
In addition to this, the Japanese yen hit 112.96 yen per dollar, nearly intact from its previous settlement. The Japanese yen has traded in an extremely narrow ban for the last four trading marathons.
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.
The European Central Bank will publish the monetary policy statement with the interest rate decision on January 21, at 14:45 MT time.
Joe Biden is going to unveil a Covid-19 relief package of about $2 trillion. After this announcement, the 10-year Treasury yield rose, adding support for the USD.
The US dollar’s weakness offered a boost to emerging-market currencies and oil.