Thursday ended with the EUR/USD being high above of local resistance of 1.10. What's the target now?
Greenback keeps to a two-week maximum
On Monday, the evergreen buck kept to the maximum for two weeks against the basket of other key currencies amid forecasts of a further increase in the interest rate in 2018. Reducing geopolitical risks led to a jump in demand for risky assets, and in particular, for the Japanese yen.
The US dollar index, displaying the purchasing power of the evergreen buck against the trade-weighted basket of six leading currencies, was intact keeping to 90.17, staying close to a two-week high of 90.25, reached on Friday.
Demand for the US currency is still high after recent statements by the US financial institution that with sustained economic surge more interest rate hikes are expected in 2018.
A higher interest rate, as a rule, acts as a support for the US currency, as it makes dollar assets more attractive for profit-seeking investors.
Besides this, the Japanese yen headed south against the dollar to a minimum of two months. The currency pair USD/JPY tacked on to 107.89.
The demand for the Japanese yen traditionally inches up in times of political or economic instability. When the confidence of investors increases, the value of the Japanese currency dives.
On Saturday, North Korea announced that it was suspending its nuclear as well as missile tests, and also closing its nuclear test site before the planned negotiations with South Korea as well as the United States.
In addition to reducing geopolitical risks, the degree of tension in the trade conflict between China and the United States also receded.
The common currency dived versus the US dollar. The currency EUR/USD inched down 0.13% coming up with an outcome of 1.2271.
On Friday, the single currency slumped to a two-week minimum against the evergreen buck after ECB Governor Mario Draghi repeated that the European Central Bank is going to act cautiously when it comes to curtailing financial incentives.
The European central bank will publish the main refinancing rate and make a statement on Thursday, July 16, at 14:45 MT time. Also, the ECB’s press conference will be later at 15:30 MT time.
Optimism about the Moderna vaccine improved the market sentiment. Let’s have a closer look, what’s happening today.
The Canadian central bank will announce interest rates and make a speech on Wednesday, July 15, at 17:00 MT time. Also, the BOC press conference will be later at 18:15 MT time.