EUR/USD: Wind blows against the dollar and mostly in favor of the euro

FXStreet Team FXStreet

September has kicked off with an extension of previous trends – higher stocks and a fall in the dollar. EUR/USD is trading close to 1.20, fueled by several encouraging factors. New German forecasts and the ISM Manufacturing PMI are awaited, Yohay Elam, an analyst at FXStreet, reports.

Key quotes

“Federal Reserve Vice-Chair Richard Clarida clarified that the Fed is currently not considering new measures such as Yield Curve Control or negative borrowing costs in the near future. Staying on the sidelines makes sense after the immense stimulus enacted by the bank earlier this year and the upcoming elections. However, politics could push the Fed into more action. Democrats and Republicans remain entrenched in their positions about the next fiscal stimulus If lawmakers continue dithering, the Fed may step in with more measures.”

“The ISM Manufacturing Purchasing Managers' Index for August will shed some light on how the world's largest economy is doing – and serve as the first hint toward Friday's jobs report. The headline is forecast to point to growth while the employment component is likely to contract once again.”

“EUR/USD's rise is also driven by factors outside America. China's independent Caixin Manufacturing PMI beat estimates with 53.1 points in August, showing that the Asian giant continues recovering from the COVID-19 fallout. AstraZeneca, a British pharmaceutical firm, announced the beginning of a broad and 50,000-strong test for its coronavirus vaccine candidate.”

“Back in the old continent, manufacturing PMIs are set to show moderate growth in August, with the exception of France, where the initial read came out at 49, reflecting contraction. COVID-19 cases are rising quickly in the eurozone's second-largest economy. Concerns are rising about the fourth-largest, Spain.”

“In the meantime, Europe's locomotive Germany is powering forward. Economy Minister Peter Altmaier is set to publish an upgraded growth forecast. Reports of the expected announcement are already underpinning the euro.”

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 loses momentum, flirts with 1.3200

GBP/USD is struggling to maintain its positive bias on Thursday, retreating toward the 1.3200 region in response to the pick in the buying interest around the Greenback. That said, Cable remains under scrutiny as cautious market sentiment keeps investors focused on the US-Iran conflict and political effervescence in the UK.

EUR/USD trims gains, challenges 1.1400

EUR/USD now gives away part of its earlier advance, receding toward the 1.1400 contention zone on Thursday. Meanwhile, the pair’s recovery comes amid extra losses in the US Dollar, at the time when while investors continue to monitor developments in the Middle East and sentiment surrounding global technology stocks.

Gold remains bid and close to $4,100

Gold accelerates its recovery and approaches the key $4,000 mark per troy ounce at the end of the week, adding to Thursday’s advance. However, expectations for a hawkish Fed remain steady and keep the yellow metal’s potential upside contained.

Crypto Today: Bitcoin at $60,000, Ethereum at $1,500, and XRP at $1 face a make-or-break test

Bitcoin (BTC), Ethereum (ETH), and Ripple (XRP) are trading in the red on Friday after three consecutive days of losses, testing their respective make-or-break support levels.

Week ahead – NFP report to challenge Dollar strength and the hawkish Fed

Dollar strength dominates markets, as the hawkish Fed overshadows geopolitics and lower oil prices. NFP week could drive September Fed hike expectations and boost market volatility. The euro lacks fresh bullish catalysts, all eyes on the preliminary inflation report and the ECB Forum.

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.