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Euro Forex Market Hits 18-Month High Against Dollar

Updated on
  • Euro Benefits From EU Recovery Deal
  • China Warns Margin Traders as Market Surges
  • US Brokers Report Record Q2 Trade Volumes

The EUR/USD forex market hit highs today which it has not seen in 18-months. The pair moved above 1.15 for the first time in that period. This trading push is largely thanks to the passing of a huge EU recovery deal yesterday. Surging markets in China meanwhile have prompted regulators to warn against illegal margin trading as markets soared. Back in the US, brokers have reported record numbers in both revenue and account numbers.

Massive Recovery Deal Drives Euro to New Heights

EU leaders finally managed to agree a deal on Wednesday on the huge recovery fund that has been on the table to help the economies of the bloc fight back against the coronavirus drop. The deal will provide €750 billion worth of funds to the region, including €390 billion in grant aid which does not need to be paid back. This was a major sticking point within the deal for several nations, though the deals passage marks a significant step in helping get the region back on track economically over the coming years.

Although there were several compromises made within the agreement such as reducing the amount of grant aid, and ensuring that repayment of any debts required, will be completed by 2058, it has still managed to give a timely boost to the EUR/USD market. Those forex trading the pair are hopeful that this will spark new life into economies across the region and beyond.

Chinese Regulators Warn Traders as Markets Boom

July has been a huge month so far for Chinese markets. Both the Shanghai, and Shenzhen composite have soared in the last two weeks. Both have increased by more than 15%, while the CSI 300 index is up more than 20%. This has prompted the Chinese Securities Regulatory Commission to issue a warning to traders who are taking advantage of illegal lenders to engage in margin trading.

This issue has proven to be a delicate balance for the regulators and powers that be in China. The huge rallies are providing excellent relief from fiscal pressure which has built up in the economy since the COVID-19 outbreak, though many are all too aware of the dangers such a boom in risky trading could pose. They do not want a repeat of the 2015 financial crash which saw trillions of dollars wiped off the market in a matter of weeks.

Major US Brokers Beat Earnings Expectations

Two of the major US forex brokers have reported record revenue numbers, and surpassed earnings expectations for Q2. TD Ameritrade reported a huge increase in daily trade numbers with a 3.4 million daily average, a more than 60% increase on the previous quarter. New account numbers were also up.

Interactive Brokers has taken advantage of a retail trading boom too with daily trades up a reported 111% for the quarter with many new traders getting in on the action during lockdown.

Anthony is a financial journalist and business advisor with several years’ experience writing for some of the most well-known sites in the Forex world. A keen trader turned industry writer, he is currently based in Shanghai with a finger on the pulse of Asia’s biggest markets.