- Currency Upbeat as Countries Ease Lockdown
- Markets Also Set to Open Positively
- Oil Continues to Fall on Lack of Storage
The Euro seemed to be emerging from its most recent slump on Monday as some more positive activity pushed the currency pair with the US Dollar back to the $1.09 mark. This move has largely been due to the apparent easing of lockdown measures in some European countries. Markets on the whole have been buoyed by this news, though the oil prices for June delivery continue to sink as storage space runs out around the world.
Easing Restrictions Positive for EUR/USD Forex Market
Although far from being close to the end of the coronavirus pandemic, there were positive signs for forex trading in the Euro to start the week. With several European countries now mulling over the easing of lockdown restrictions, traders have begun to move forward with a hint of confidence in the market.
Several European nations, including some of the worst hit have moved to allow more freedom of movement in the last couple of days. Lockdown easing measures have been put in place in Italy, Spain, Germany, and others. The return to work of UK PM Boris Johnson and how he acts on the nation’s lockdown may also have an impact on the GBP forex market.
Wall Street also Showing More Confident Signs
It is not only forex brokers who are seeing a boost in activity on Monday. Major markets in the US have also been signaling a more positive move come the opening bell on Wall Street. The Dow Jones, S&P 500, and NASDAQ all advanced at the beginning of the day amid a more positive mood that has not been present for several weeks.
This comes as several US States, including New York where Governor Andrew Cuomo announced that they will approach a phased reopening of business, have announced their intentions to start reopening. Georgia, Texas, and South Carolina among others, have started to relax social distancing and allowed for the reopening of restaurants.
Markets have also been boosted on the expectation of more stimulus from central banks around the world. The Bank of Japan recently announced such measures. The European Central Bank is expected to follow a similar pattern of increased bond purchases. This has had a positive impact on US market confidence.
Oil Storage Continues to Drag Prices Down
There was no such confidence boost in oil markets to begin the week. The same problem that has plagued the market in recent weeks has continued to drag down prices for June deliveries. This issue is storage and it continues to disappear around the world. The production cuts agreed by OPEC+ earlier in the month, are due to come into effect this week, but traders around the world fear that this may not be enough to match the huge drop-off in demand caused by COVID-19. Prices for WTI crude took at 25% dive on Monday to trade at just above $12 per barrel at the time of writing.[table “14” not found /]