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Euro Forex Market Pulls Back as Dollar Strengthens

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Euro Forex Market Pulls Back as Dollar Strengthens
  • EUR/USD Retreats from 18-Month High
  • Pound Bucks Trend Amid Trade Deal Hopes
  • Markets Set to Open Lower Despite Relief Plan

The EUR/USD forex market which has been buoyant in recent days has started to pull back slightly today. The market was trading at 1.175 this morning, still not far from its highest point since September 2018. In the UK, the Pound went against the trend to continue to strengthen on hopes that a UK/US trade deal will be agreed, and US markets are set to open slightly lower today despite the unveiling of a new relief plan to help boost the economy.

Strong Movement from EUR/USD Comes to an End

The EUR/USD pair has by all accounts been languishing since the beginning of the coronavirus crisis. Recent days though, particularly after passage of the EU rescue fund deal last week, has seen the pair grow by the day thanks to the bullish form of those forex trading in the market. This has sent the pair to highs which it has not seen since September 2018.

There was a slight retreat today though. This movement has been brought about largely by a stronger US Dollar as opposed to a weaker Euro. Although COVID-19 cases are continuing to rise, jeopardizing the American economic recovery, there are renewed hopes of another stimulus package which has been proposed to the figure of $1 trillion. This has managed to boost the US Dollar back to life after several days of being beaten down by other major forex currencies.

GBP/USD Market Reverses General Market Movement

Although the Greenback has regained a degree of strength thanks to another possible Fed stimulus package, it has still continued to lose ground to Sterling which has crept higher in trading today above 1.29. Forex brokers and market analysts report this is largely due to growing hopes that the two nations can reach a lucrative trade deal which both seem eager to complete.

This potential trade deal would be huge at a value of several hundred billion US Dollars. Talks have been advancing with a further round set to take place this week, and although there is nothing conclusive agreed yet, both sides appear hopeful to conclude a deal sooner rather than later. The US administration may well favor this being before voters take to the polls in the November US election.

US Market Dips Slightly Despite Stimulus Plan

The major markets on Wall Street started the day by dropping slightly again. The Dow Jones traded down more than 150 points as markets opened. This is despite the possibility of further stimulus being injected and another round of $1,200 stimulus checks being delivered.

This week is also the busiest when it comes to company earnings reports. More than 170 companies are due to report by the end of the week with the market set to see some changes in the meantime based on this data, the proposed stimulus, and the continually rising number of COVID-19 cases.

 

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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.

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