EUR/USD: Europe's growing coronavirus crisis to stop the recovery


EUR/USD has been advancing as the dollar pares some of its Fed-related gains but US consumer sentiment and coronavirus headlines from Europe may reverse the recovery, in the opinion of FXStreet’s analyst Yohay Elam.

See – EUR/USD maintains the sideways range with resistance seen at 1.1868 – Credit Suisse

 

Key quotes

“The Fed signaled no rate rises through 2023 – but also no imminent action despite rising uncertainty about the outlook. Federal Reserve Chairman Jerome Powell also indicated that policymakers would be wise to act – adding fiscal stimulus.” 

“It seems that Republicans and Democrats seem to be making some progress toward agreeing on a new relief package. Nevertheless, there is still no white smoke above Capitol Hill, potentially as politicians have little incentive to compromise ahead of the elections. Failure to boost the economy could trigger further flows into the greenback.”

“Looking at the old continent, there are is a good reason to expect the euro to fall. Coronavirus cases continue rising rapidly in Spain, France, and even Germany and Austria – countries that initially coped well with coronavirus.” 

“Later on Friday, investors will be looking at the University of Michigan's preliminary Consumer Sentiment Index for September. A minor advance is expected yet the disappointing retail sales figures for August imply that consumers may be struggling. The withdrawal of emergency government support is limiting the recovery in consumption.”

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.

Feed news

Latest Forex News


Latest Forex News

Editors’ Picks

EUR/USD hits the highest in a month on stimulus hopes

EUR/USD has advanced toward 1.1850, reaching the highest since mid-September. US lawmakers have reportedly narrowed the gap in stimulus talks. The safe-haven dollar is on the back foot and investors are shrugging off concerns about new European COVID-19 cases.

EUR/USD News

GBP/USD bounces on better market mood

GBP/USD has recaptured the 1.2950 level after a call between Brexit negotiators was labeled as constructive. PM Johnson is set to put the Greater Manchester area under lockdown and US fiscal stimulus talks are eyed.

GBP/USD News

XAU/USD struggles for direction, stuck in a range near $1900 mark

Gold extended its sideways consolidative price moves through the early North American session and remained confined in a narrow trading band, around the $1900 mark.

Gold News

US Markets React: Gold gains, equities and dollar tumble on stimulus jitters

The stimulus election minute, the most popular dance in Washington, went through another few elaborate rounds on Capitol Hill today with Nancy Pelosi's office reporting progress in afternoon talks with Steven Mnuchin.

Read more

WTI extends the consolidation around $40.00 ahead of API

Prices of the barrel of WTI extend the consolidative mood for yet another session on Tuesday, always around the key $40.00 level.

Oil News

Forex MAJORS

Cryptocurrencies

Signatures