EUR/USD: Whopping gains to extend after White Monday
|EUR/USD has hit the highest level since March amid optimism in Europe, as some European traders returned from a long weekend with enough energy to push the euro higher – and for good reasons, according to FXStreet’s analyst Yohay Elam.
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Key quotes
“Major economies in the old continent continue making gains against coronavirus, with Spain reporting no deaths from the disease on Sunday. Weekend figures tend to be optimistic, yet the downtrend is clear. Germany, France, and Italy also continue enjoying a downtrend.”
“Speculation is mounting ahead of the ECB's decision on Thursday. The Frankfurt-based institution may defy the German constitutional court's ruling – that deemed the bank's QE program as partly illegal – and expanding its bond-buying scheme. That would keep the government's borrowing costs low and support the recovery. Spreads between Italian and German bunds remain below 200 basis points.”
“Investors have been following the unfolding of protests in the US, following the murder George Floyd, an unarmed black person at the hands of the police. President Trump threatened to bring in the military and called governors ‘weak.’ Densely packed demonstrators may contribute to spreading coronavirus and delay the reopening, boosting the safe-haven dollar.”
“Fiscal stimulus may also boost equities and continue weighing on the greenback. According to reports by Fox News, Republicans and Democrats are accelerating talks for another stimulus package in response to the protests.”
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