EURUSD continues to be strong in the morning of trading on Tuesday in the European…
EURUSD rises as “Janet Yellen” testimony awaits
EURUSD rebounded in Tuesday morning trading in the European market, to trade above its lowest level in six weeks that it recorded yesterday. This recovery comes in light of the decline of the US dollar against most major currencies before the inauguration of “Joe Biden” as President of the United States. Markets are on the looming testimony of “Janet Yellen” candidate for the position and the cicada of the US Treasury on Capitol Hill later in the day.
The EURUSD pair added a 0.4% rise to trade at $ 1.2118, ending the series of losses that it suffered over the course of five days, during which it recorded its lowest level in a month and a half at $ 1.2053, due to the decline in the risk appetite of investors and their desire to buy the US currency As an alternative investment.
EURUSD is bouncing ahead of the European interest rate decision
The European Central Bank will start its first monetary policy meeting for this year on Wednesday and will issue its ruling on interest rates in the European Union on Thursday, this decision comes at a time when the European Union is implementing vaccines to contain the Coronavirus pandemic, and it also comes at a time when the EUR / USD pair By paring some of its earlier gains, which is a good thing for the European Union.
However, the European economy suffers from the continuing high number of cases of Coronavirus in most European countries, and this has led to more countries announcing some restrictions on movements that will have an impact on the recovery.
Also, the meeting will start after the Italian parliament issues its ruling on Prime Minister Giuseppe Conte, as he needs to vote from his conservative party and some members of the opposition to stay in power. However, economists believe that the European Central Bank will not adjust its monetary policy. Interest and QE policy objective unchanged, with very low inflation, the bank will likely not indicate any future changes in its policy.
The US dollar drops before Yellen’s testimony
The US dollar weakened against most other currencies as investor focus shifted to Yellen’s testimony in the US Congress later in the day.
The dollar index is trading at 90.547 points, down 0.2%, after rising yesterday at 90.94 points, the highest since December 21.
Investors are preparing to see what Janet Yellen’s testimony, who held the position of US Federal Reserve Chairman from 2014-2018, and potential for the position of Treasury Secretary, is expected to speak about the need for substantial financial incentives and adherence to the exchange rate set by the market.
Analysts say more fiscal stimulus and adherence to the market exchange rate would fit their views on further dollar weakness this year.
Professional Trader and Analyst, economist in Financial and Forex market since 2004.holds an MBA from the American University in Egypt. Mohammed works as an economic writer and technical & fundamental analyst for many international Forex and financial trading companies in both English and Arabic on a daily basis.