Connect with us

Forex

Euro Forex Market Remains Low But Steady

mm

Published

 on

  • US Dollar Firm to Start Day
  • COVID-19 Pressures Keep Euro Down
  • Stocks Look for Positive Holiday Week

The US Dollar forex market held its ground in the early hours of the European session coming off a very strong previous week. The US Dollar Index traded quietly but is still above 96 while the Euro has regained some momentum to trade just below 1.13. Renewed COVID-19 restrictions in some European nations though threatening to derail the currency even further with protests taking place in several countries reentering lockdowns. On Wall Street, futures were trading higher as many look to the week for a positive on the holiday-shortened Thanksgiving week.

Dollar Retains Strength in Early Trading

Those forex trading the Dollar have seen more strength in recent weeks than in almost any period over the last 2 years. This has managed to push the Dollar to new highs for 2021, and the US Dollar Index to its highest point in almost 18 months. There has been a slight pushback from the Euro today as the market outlook brightens, but the USD has still managed to stay very firm. 

Some of the factors at play that have kept the Dollar strong despite an improving risk appetite in the market include the Treasury yield that has stayed above 1.5% and some hawkish comments from the Fed. These suggested that approaching the end of the year may be a good time to further reduce asset purchases, essentially to increase the speed of tapering with some also suggesting rate hikes as soon as April.

COVID-19 Worries Weigh on Euro

Another factor that has seen forex brokers note a firming up of the Dollar position, is the reemergence of coronavirus in Europe, and the approach to this from some of the key EU states. Austria has been one of the first countries to announce a return to full lockdown to enable them to curb cases in the country. 

Germany, the largest economy in the region has also been dealing with a new wave that they say has strongly hit the nation, and the government there has noted that they will follow the Austrian lead and return to lockdown if the case numbers can’t be reduced. Protests have been seen against new restrictions in Austria, Belgium, and the Netherlands, while such a move is also likely to impact Euro confidence.

Markets Look for Thanksgiving Boost

It is a shortened trading week on Wall Street with markets closing at lunchtime on Friday, and being closed on Thursday for Thanksgiving. Traders on the street will be hopeful of a positive week in what has traditionally been a strong time of year.

Early trading on Monday shows the Dow Jones in positive territory alongside the other key indices after what was a quiet end to last week. The focus of the day will remain on COVID-19 news from Europe while also having an eye on US data from October’s Existing Home Sales.

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.

Advertiser Disclosure: Securities.io is committed to rigorous editorial standards to provide our readers with accurate reviews and ratings. We may receive compensation when you click on links to products we reviewed.

ESMA: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Between 74-89% of retail investor accounts lose money when trading CFDs. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

Investment advice disclaimer: The information contained on this website is provided for educational purposes, and does not constitute investment advice.

Trading Risk Disclaimer: There is a very high degree of risk involved in trading securities. Trading in any type of financial product including forex, CFDs, stocks, and cryptocurrencies.

This risk is higher with Cryptocurrencies due to markets being decentralized and non-regulated. You should be aware that you may lose a significant portion of your portfolio.

Securities.io is not a registered broker, analyst, or investment advisor.