EUR/USD: The euro has reasons to rise while the dollar has no upside driver

FXStreet Team FXStreet

The euro has been benefiting from a series of positive news coming out of the old continent and by investors shrugging off concerns about Sino-American relations. Yohay Elam, an analyst at FXStreet, lays out some reasons to favor further gains.

Stay up to speed with our last EUR/USD news

Key quotes

“German coronavirus cases have risen by only 0.2% and the Reproductive indicator (R) remains depressed at 0.83. Italy recorded its lowest number of deaths since March, while daily mortalities in Spain have completed a week under the 100 mark. All three countries have continued reopening the economies and are moving to reopen borders as well.”

“Investors are content with the ECB's bond-buying scheme. François Villeroy de Galhau, a member of the bank's Governing Council, described the latest program as a ‘masterpiece.’ The PEPP stands at €750 billion and many expect the Frankfurt-based institution to expand it next week.”

“Fractures are emerging in the ‘Frugal Four.’ Austria, one of the hawkish members of this club, is reportedly open to accepting some grants in the new EU recovery fund. The €500 billion strong program now seems to have higher chances of passing.”

“Beijing sees Washington's legislation to limit the listing of Chinese companies in the US as hostile. Investors may see this ‘new cold war’ as mild while both countries continue honoring the trade deal. However, it is essential to note that the mood may change.”

“Volatility is set to increase as American traders return from their long weekend. Several housing figures are on the docket, including sales of new homes, yet perhaps the most significant release is the Conference Board's Consumer Confidence measure. It is expected to bounce from April's lows.”

“Hopes for a new COVID-19 vaccine downed the greenback. Novavax, an American pharma firm, will start a human trial in Australia, with results due out in July.”

Author

FXStreet Team

FXStreet

Composed of a group of economic journalists and FX experts, the FXStreet content team produces and oversees all content published on FXStreet. It provides a purely journalistic approach to the Forex market.

GBP/USD weakens below 1.3250 as UK Prime Minister Keir Starmer resigns

The GBP/USD pair loses ground to near 1.3245 during the early Asian trading hours on Tuesday. Political uncertainty in the United Kingdom continues to weigh on the British Pound against the US Dollar. The preliminary readings of the S&P Global Purchasing Managers Index from both the US and the UK are due later on Tuesday.

EUR/USD moves little amid market caution on ongoing US-Iran talks

EUR/USD steadies after registering modest losses in the previous day, trading around 1.1430 during the Asian hours on Tuesday. The currency pair remains locked in a tight range as traders closely monitor diplomatic developments surrounding ongoing talks between Washington and Tehran in Bürgenstock, Switzerland.

Gold defends $4,100, but for how long?

Gold is back in the red early Tuesday, having faced rejection once again at $4,200. The US Dollar holds at yearly highs amid hawkish Fed outlook, scepticism over US-Iran deal progress. Gold is primed to attack $4,100 as the daily technical setup remains in favor of sellers.

Bitcoin holds steady as ETF outflows decline – DEXE and TIA extend gains

Bitcoin hovers above $64,000 at press time on Tuesday, holding steady after a roughly 4% drop last week. Data shows that institutional outflows are easing, suggesting broader market recovery potential, while DeXe and Celestia have emerged as frontrunners over the last 24 hours.

Are American consumers actually “resilient“?

A common label gets placed upon American buyers: resilient. Just last week, Marianne Lake, the CEO of Consumer and Community Banking — and a member of the JPMorganChase Operating Committee — affirmed this sentiment. While she did note some weariness regarding future inflation’s effect on consumers, she reiterated the common adjective: resilient.

Regime change: Inside Kevin Warsh's first move to make the Fed unreadable on purpose

The rate did not move. That was the least interesting thing about Kevin Warsh's first meeting in charge of the Fed. The FOMC held its benchmark at 3.50%-3.75% for the fourth straight meeting, exactly as priced, and then the new chair used his first press conference to dismantle the machinery the market has leaned on for a decade.