EUR/USD has been on the rise as coronavirus fears send US yields and the dollar lower. Further virus headlines and speculation about monetary policy are set to dominate markets, in the opinion of Yohay Elam from FXStreet.
“The common currency has been benefiting from record low yields on US treasuries, with ten-year benchmark bonds returning 1.306, an all-time low. Demand for safe-haven American debt has pushed yields lower, making the greenback less attractive.”
“Bond markets are reflecting cuts in short-term interest rates, with the European Central Bank now set to cut 25 basis points by year-end and the Federal Reserve to slash borrowing costs twice.”
“Coronavirus has now reached Germany, in addition to Austria and mainland Spain. That may further undermine economic activity. Reports from additional countries may weigh on the euro.”
“The US calendar features only New Home Sales, leaving coronavirus headlines and resulting market swings to rock markets.”
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