EUR/USD: German strength overshadows US politics and boosts the euro
|EUR/USD is rising after German Manufacturing PMI smashed estimates ignoring US politics (for now). Speculation about politics is set to increase as the week draws to an end, while COVID-19 will probably play second fiddle, Yohay Elam, an Analyst at FXStreet, reports.
Key quotes
“Markit's preliminary German Manufacturing Purchasing Managers' Index has jumped to 58 points – far above estimates and reflecting robust growth. That contrasts with misses in the country's services sector and downbeat figures from France. The upbeat figure has helped the euro recover from other depressing developments. COVID-19 continues raging in the old continent, with record numbers of cases in several countries.”
“While Congress could still approve a multi-trillion package during the ‘lame-duck’ session – the period following the vote and before newly elected officials settle in – uncertainty rises after the all-important event.”
“President Donald Trump and challenger Joe Biden clashed in a televised debate that was far more civilized than the previous one. The incumbent´s performance was more solid, potentially leading to an additional tightening in the polls. The US dollar has room to rise amid concerns about a contested election and lower chances for additional funds from the government.”
“Markets are banking on a Democratic clean sweep – or ‘blue wave’ – to provide a generous stimulus package. If Republicans hold onto the Senate, the relief would likely be smaller, but it could be somewhere in between if Trump wins re-election and forces his party to go along with more stimulus.”
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