EURUSD extends its losses to the lowest level in four months

Mohammed Abdelkhalik
March 8, 2021

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EURUSD Forecast – 9th March 2021

EURUSD extended its decline during trading on Monday in the European market. It recorded its fourth consecutive daily loss and its lowest level in four months. This decline comes in light of the strength of the US dollar supported by the continuous rise in US Treasury yields.

The EURUSD pair traded at $1.1865, the lowest since last November, retreating by more than 0.4% from today’s session opening level at $1.1917.

The single currency recorded its third weekly decline with the end of last week’s trading, incurring losses of 1.35%, due to the large gains in the US dollar in light of the high yields of Treasury bonds.

EURUSD chart - 8th March 2021

EURUSD continues to decline

The US dollar index (DXY) rose to its highest level since November of last year, as UK forex trading investors continued to focus on buying the US currency, as bond yields resumed rising, and the dollar also supported jobs data released last Friday.

The dollar index traded at 92.3 points, up by more than 0.3%, achieving a gain of nearly 3% above this year’s low.

Fed Chairman Jerome Powell said Thursday that he would be concerned about volatile markets.  However, he did not repeat the specific actions he would like to take to reduce volatility. He also said that it was too early to abandon the current policies.

However, analysts believe that the market is ahead of the Fed, this is evidenced by the recent price action in the bond market, as the 10-year yield rose to the highest level since February 10 last year.

The market is awaiting the stimulus package

Hopes in the markets have increased dramatically, especially after the US Senate discussed the new stimulus package of $1.9 trillion. There are great chances that all Democratic senators will vote in favor of the bill.

The dollar index also interacts with US nonfarm payroll numbers released last Friday, according to the Bureau of Labor Statistics (BLS). The US economy created more than 379,000 jobs in February, higher than January data that added 40,000 jobs. Unemployment ranged from 6.3% to 6.2%, while the average hourly wage remained at 5.3%.

Economists expect this trend to continue, boosted by the imminent reopening of the economy as the number of coronavirus cases declines and vaccinations increase.

Author Mohammed Abdelkhalik

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.