empty
 
 
You are about to leave
www.instaforex.eu >
a website operated by
INSTANT TRADING EU LTD
Open Account

20.07.202013:40 Forex Analysis & Reviews: EUR / USD. Cessation challenges EU leaders

Long-term review
This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here.

Exchange Rates 20.07.2020 analysis

On Monday, the euro against the US dollar hit four-month highs on hopes that EU leaders will still be able to break the deadlock and reach an agreement on a fund to help the region's economy.

According to Reuters, the so-called "Mean Four" is ready to agree to a fund consisting of grants in the amount of € 390 billion and loans in the amount of € 360 billion. However, it is not clear whether this option will suit Germany, France, Italy, and Spain.

However, investors seem to regard this issue as resolved. The EUR / USD pair is trading at its highest levels since March, around 1.1460.

The growth of the main currency pair is also due to the fact that risk appetite continues to be strong, supported by bets on more stimulus in the entire Eurozone countries.

At the end of last week, a struggle broke out between the Republicans and the Democrats in the US Congress for a new law to help victims of the coronavirus. The former believe that a new package of support measures should cost no more than $ 1 trillion, while the latter suggests much more assistance around $ 3 trillion.

"We see increased political pressure on the Republicans to compromise with the Democrats. Republicans in the Senate are not in a position to restrain increased incentives, "strategists at Standard Chartered Bank said.

Expectations of increased government spending in the United States offset fears of rising COVID-19 cases in the country, as well as worries about deteriorating relations between Washington and Beijing.

The USD index has already retreated to the lows in March and is currently trading at around 95.7 points.

The talks of EU leaders on the regional economic recovery fund have been going on for the fourth day.

"Given that they can narrow the odds to just € 50 billion, market participants are still hoping for a compromise agreement, although the risk that the deal will not be reached remains," said Christopher Wong of Maybank.

"It looks like the EU is about to overcome a major hurdle. If the European leaders come to an agreement, then the EUR / USD pair may go into a new trading range (perhaps 1.14-1.16), in contrast to the 1.11-1.14 range, in which it has been stuck for a while. ", said experts at Societe Generale.

It is assumed that the further dynamics of EUR / USD will depend on the success in the fight against coronavirus, news on stimulus measures, and the demand for risk.

Viktor Isakov
Analytical expert of InstaForex
© 2007-2024

Open trading account

InstaForex analytical reviews will make you fully aware of market trends! Being an InstaForex client, you are provided with a large number of free services for efficient trading.




You are now leaving www.instaforex.eu, a website operated by INSTANT TRADING EU LTD
Can't speak right now?
Ask your question in the chat.

Turn "Do Not Track" off