- EUR/USD Market Trading at Highest Point in Months
- European Markets Also Positive Despite US Unrest
- Oil Continues to Push Higher as Supply Cuts Continue
The EUR/USD forex market has continued its return to form today. The pair is seeking an eighth consecutive gaining session as it trades above the $1.12 mark. This positive sentiment has rippled through to European stock markets. Traders will await the opening bell on Wall Street to measure the impact that the continuing unrest in the country will have on the markets. Oil too continues a prominent return to healthy prices with the $40 per barrel mark being passed in the futures market.
Euro Positive Against Dollar as Data Continues to Improve
The Euro is continuing to improve against an out of favor US Dollar. Strong hopes of reopening across Europe coupled with increasingly positive PMI data released today has seen the currency step up again after 7 consecutive sessions that have ended in a gain. Forex brokers have also noted the Euro has taken advantage of a very weak US Dollar. This ultimately points to a market that is growing in confidence and so, stepping away from the safe haven of the greenback.
Although GDP is still forecasted to slide around 9% in 2020 for the Eurozone, traders remain optimistic. This optimism has been furthered by a solid rebound in key PMI figures such as the Eurozone composite index. This bounced from a record low of 13.6 the previous month, to 31.9 for May. The Services Index PMI charted a similar gain. While it is worth noting these numbers are still not hugely positive, their rate of increase has restored some confidence in the market.
European Stocks also on the Rise
Forex trading in Europe has not been the only area to benefit. Stocks across the continent also traded positively on Wednesday with major indices continuing to benefit from investor optimism and a stage by stage reopening across the continent. This move comes despite unrest across the US as protests and curfews continue in the aftermath of the George Floyd death which has seen demonstrations across the nation.
US markets too are expected to open with gains at the opening bell on Wednesday. The Dow is positioning for a 200 point gain as momentum behind reopening of the economy continues to gather despite the edgy social climate. This may have been helped also by a smaller than expected private payroll decline for May. The number clocked in at 2.76 million.
Oil Prices Continue to Get Back on Track
Oil prices have hit a three-month high with Brent Crude trading at above $40 on Wednesday. This rapid rebound comes after record lows in April as the COVID-19 pandemic spread. The continued rise comes as many analysts expect the production cuts agreed in April by OPEC+ to be extended.
These cuts account for more than 9 million barrels per day and helped stabilize oil prices on the back of a record drop in demand. The current deal is due to expire at the end of June though many expect the group of oil producing nations and their allies will agree to extend these cuts when they next meet on Thursday.[table “14” not found /]