EUR/USD is rising as the ancient logic of buying low, selling high seemed to work in bond markets, this time with a substantial impact on the dollar. Looking ahead, Washington's fiscal impasse, vaccine hopes and jobless claims are in play, FXStreet’s analyst Yohay Elam reports.
Key quotes
“Investors sold off US treasuries ahead of the massive $38 billion auctions on Wednesday, pushing bond yields higher and boosting the dollar. Once Uncle Sam issued that debt at a relatively high yield, traders piled into bonds, pushing yields lower and taking the air out of the dollar.”
“The US coronavirus situation is better than it used to be but is improving at a snail's pace. The old continent is better positioned.”
“The burning issue in Washington is the impasse on Capitol Hill – Democrats and Republicans are still ‘far apart’ on reaching an accord on the next fiscal relief package. Federal Reserve officials have been urging lawmakers to act, raising their rhetoric.”
“Despite concerns about the US economy, investors are optimistic about a vaccine, as efforts are accelerating – especially after Russia's controversial announcement about developing immunization. The S&P 500 briefly hit a new high on Wednesday, and the risk-on mood is pushing the safe-haven dollar down.”
“Later in the day, weekly jobless claims will provide an updated view of the US economy. Applications dropped sharply last week after several weeks of worries. Another upbeat figure could help the greenback recover, but nothing is certain.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
AUD/USD remained bid above 0.6500
AUD/USD extended further its bullish performance, advancing for the fourth session in a row on Thursday, although a sustainable breakout of the key 200-day SMA at 0.6526 still remain elusive.
EUR/USD faces a minor resistance near at 1.0750
EUR/USD quickly left behind Wednesday’s small downtick and resumed its uptrend north of 1.0700 the figure, always on the back of the persistent sell-off in the US Dollar ahead of key PCE data on Friday.
Gold holds around $2,330 after dismal US data
Gold fell below $2,320 in the early American session as US yields shot higher after the data showed a significant increase in the US GDP price deflator in Q1. With safe-haven flows dominating the markets, however, XAU/USD reversed its direction and rose above $2,340.
Bitcoin price continues to get rejected from $65K resistance as SEC delays decision on spot BTC ETF options
Bitcoin (BTC) price has markets in disarray, provoking a broader market crash as it slumped to the $62,000 range on Thursday. Meanwhile, reverberations from spot BTC exchange-traded funds (ETFs) continue to influence the market.
US economy: slower growth with stronger inflation
The dollar strengthened, and stocks fell after statistical data from the US. The focus was on the preliminary estimate of GDP for the first quarter. Annualised quarterly growth came in at just 1.6%, down from the 2.5% and 3.4% previously forecast.