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EURUSD extends its losses to its lowest level since July 2020
EURUSD extended its losses on the morning of Wednesday’s trading in the European market, and recorded the sixth consecutive daily loss, reaching its lowest level since July 2020. This comes amid strong fears that differences between monetary policies in Europe and the United States will continue to expand. Especially with the continued release of strong US economic data.
EURUSD continues to decline
The EURUSD pair traded at the level of 1.1263 dollars, and this is the first time that the pair fell below the 1.3 level since July 2020, losing about 0.5% from the opening level of today’s session at 1.1320 dollars.
The single currency closed yesterday’s trading, down by 0.4% against the US dollar for the fifth consecutive day, after the US economy released strong data on retail sales for the month of October.
US retail sales data
The EURUSD fell following the release of relatively strong retail sales figures in the US, according to the statistics agency. The country’s headline sales rose from 0.8% in September to 1.7% in October, better than the median estimate of 1.2%.
Core retail sales, excluding volatile food and energy prices, rose from 0.7% to 1.7%, this was a better-than-expected 1.0%, the retail watchdog group jumped from 0.5% to 1.6%.
These numbers mean that American consumers are still doing well even as prices rise. First, in the same month that retail sales jumped, inflation jumped to the highest level in more than 30 years.
This strength may be due to the overall labor market and the fact that many middle-class Americans have significant savings, non-farm payrolls data released two weeks ago showed that the unemployment rate has fallen to 4.6%, and wages have rebounded.
The implication of these strong US retail sales numbers is that the Fed is likely to move more aggressively in the future towards tightening its monetary policy, unlike the European Central Bank, in its previous interest rate decision The Fed decided to keep interest rates steady and reduce the amount of easing Quantitative, this is likely to be the main reason why the EUR/USD has sold off heavily.
The pair also declined after strong Eurozone GDP figures, according to Eurostat Eurozone economy expanded by 3.7% in the third quarter while employment change improved by 2%.
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.