EURUSD Weekly Outlook: 12th October 2020 USD rose in the European market on Monday against…
EURUSD fell to its lowest level since November 2020
EURUSD fell strongly in the morning trading on Wednesday in the European market, and extended its losses for the fourth consecutive day, recording its lowest level during 2021, this comes in light of the strength of the US dollar and its rise against most major currencies, driven by gains in long-term bond yields.
EURUSD continues to decline
The EURUSD pair traded at $1.1656, the lowest since November 2020, losing about 0.25% from the opening level of today’s session at $1.1683, and it closed yesterday’s trading, down by 0.1% for the third consecutive day amid growing fears of a contradiction between monetary policies for the central banks of Europe and the United States.
European Central Bank President Christine Lagarde is expected to make several statements later in the day as part of an ECB event.
The US dollar rises, led by gains in US bonds
The US dollar index rose to its highest level since November 2020 with higher Treasury yields and after relatively weak consumer confidence numbers, the index traded at 93.80 points, the highest in 2021, up about 2% above the September low.
Data released by the US economy showed that consumer confidence during the month of September fell to 109.3 from August’s reading of 115, this decline was well below the average estimate of 114.5 and is the lowest level in seven months.
The decline in confidence was mostly due to the high cost of products and the high number of MERS-CoV infections, and the consumer confidence data is an important figure due to the fact that consumer spending is the largest component of the country’s economy.
Meanwhile, the US dollar index also rose due to higher bond yields, with the 10-year Treasury yield rising to 1.55%, its highest level in more than three months. The increase was mostly due to the recent hawkish Federal Reserve decision.
In a statement on Tuesday, Federal Reserve Chairman Jerome Powell warned that inflation could remain stubbornly above its 2% target for a while.
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.