EUR/USD: Europe fights coronavirus and stuns the dollar

EUR/USD has been advancing as investors shrug off rising US coronavirus cases. There are several topics such as inflation figures or the negotiation about the EU Fund moving the pair, yet coronavirus is by far the most significant one, FXStreet’s analyst Yohay Elam briefs.

Key quotes

“Coronavirus is raging in America – Texas' positive test rate has surged above 14%, Arizona and Georgia have reported a record number of cases, and Florida is not far behind. California, the largest and richest state, will be closing bars and in general – US cases topped 2.5 million.”

“Flare-ups have been recorded in various places in the old continent, but the situation is well under control. Per million, infections remain depressed in Europe's four large countries while they are clearly rising in America.” 

“Preliminary inflation figures from Germany for June carry expectations for a bounce after substantial falls beforehand. Spain's Consumer Price Index surprised with an annual fall of 0.3% compared with -0.9% projected. Isabel Schnabel of the ECB said that inflation could dip below 0%, potentially triggering more monetary support. On the fiscal front, leaders are gearing up toward another discussion about the EU Fund, after failing to agree beforehand. Emmanuel Macron suffered a defeat in local elections in his country, somewhat weakening his hand.” 

“The European Commission is set to release its new travel guidance on Monday or on Tuesday, probably excluding visitors from the US amid the second wave. That would add to trans-Atlantic tensions, following both sides' inability to agree on several trade issues.”