G20: what did the leaders decide?
The G20 summit took place in Bali, Indonesia, on November 2022…
Bad days for the greenback
Information is not investment advice
The USD is trading at its 7-week low, and it looks like it will continue falling further. If we just look at the major pairs like EUR/USD, GBP/USD, and USD/JPY, we will notice that technical analysis stands for the continuation of the US dollar’s weakness.
For example, there is the weekly EUR/USD chart below. It has nicely bounced off the key level of 1.1600, which it has failed to cross already in previous years. It was a natural sell-off after the breakout of the significant resistance, which turned into the support level now. So, we can assume that the pair will stick to its uptrend further.
However, some analysts believe that the euro is undeservingly strong as the Eurozone reported a record number of new infections. Elsewhere, European PMI reports came out mixed today: the Manufacturing report beat estimates, while the Services one came out worse than the forecasts. Indeed, coronavirus hit mostly the service sector.
Let’s discuss the USD from the fundamental side now. One of its main drivers now is fiscal stimulus. House Speaker Nancy Pelosi claimed some progress in talks, signaling that the stimulus package will be delivered soon. However, Republicans aren’t so optimistic, they consider that the relief package won’t be imposed until after the election. That drove safe-haven assets up, especially the Japanese yen.
Anyway, the presidential election is getting closer, and national polls point to Biden’s victory. However, the last word will be after the Electoral College. Actually, the last time Trump took the minority in national polls as well, but in the end, he won.
There is a consensus on the market, that if Biden wins, the USD will drop, while stocks will be boosted. Why? His victory will reduce the market uncertainty and Democrats can unveil the larger stimulus package, which will support investor’s confidence. As a result, riskier assets like stocks will be in high demand.
According to BK Asset Management, the US dollar will stay weak ahead of November 3 vote, “the near possibility that we’re going to get more bad news or at least no good news from now to the election is driving investors out of the greenback”.
Follow further news about stimulus talks and the election to keep up with the market trends!
Similar
The End of Era: What Might the UK Face Next?
The deafening news shocked the whole world yesterday: the British Queen Elizabeth II died peacefully at the age of 96…
Why didn't oil prices calm despite OPEC+ attempts?
After months of pressure from the White House, Saudi Arabia relented and agreed with other OPEC+ members to increase production.
Popular
What Will Happen with the Euro? An Economic Perspective.
eurusd-is-falling-what-to-expect-from-the-future-price-movement
Will Australia's "Rampant Inflation" Prevail in May?
Greetings, fellow forex traders! Exciting news for those with an eye on the Australian market - the upcoming interest rate decision could be good news for Aussies looking to refinance or take out new loans. The Mortgage and Finance Association Australia CEO, Anja Pannek, has...
How Will BoJ Meeting Affect the Yen
Hold onto your hats, folks! The Japanese yen took a nosedive after the Bank of Japan (BOJ) left its ultra-loose policy settings unchanged, including its closely watched yield curve control (YCC) policy. But wait, there's more! The BOJ also removed its forward guidance, which had previously pledged to keep interest rates at current or lower levels. So, what's the scoop? Market expectations had been subdued going into the meeting, but some were still hoping for tweaks to the forward guidance to prepare for an eventual exit from the bank's massive stimulus
Choose your payment system
