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Euro Forex Market Remains Weak in Early Trading

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Euro Forex Market Remains Weak in Early Trading
  • ECB Outlook Further Hampers Euro
  • USD Remains Safe Haven for Cautious Traders
  • Further Dip Expected at Opening Bell

The week remains broadly unpredictable for the forex market as well as others. Both the Euro and Pound have fallen below major levels in recent days with the Euro dipping below the $1.17 mark to new monthly lows. This demonstrates that despite the continuing rise in COVID-19 cases and the election less than a week away, the Dollar remains in demand as a safe haven for most traders. This may be further tested today with plenty of data figures to be released and futures trading on Wall Street signaling another drop at the open.

Negative ECB Comments Drain Euro Confidence

The Euro has found itself under a certain amount of pressure all week with the rollercoaster that American markets have endured. This uncertainty on Wall Street has pushed many in forex trading back to the relative safety of the Dollar. Combining this with the similarly increasing coronavirus case numbers and lockdowns across Europe, and the Euro has had a tough time.

Prior to today, the pair has charted four consecutive negative days to no sit just above a monthly low. This was not helped by comments from the European Central Bank that the future at least in the near-term, looked bleak. This included a commitment to keep interest rates at their current level until at least December, and the possibility of taking action to further support the economy at the next policy meeting.

Traders Continue to Hold USD Amid Uncertainty

Despite the fact that uncertainty also reigns in the US with the upcoming Presidential Election and a continually increasing case number spooking equities markets, forex brokers noted that many traders remained undeterred in holding the US Dollar.

This holding pattern looks set to continue today with minimal economic data to be released that could actually impact the market mood. The main focus in this respect will be to polling data and coronavirus case number reports. A further slip in the stock market as seems like this morning would also serve to strengthen the hold on the USD for the time being with many of the other major currencies also looking unappealing for traders at present.

Stock Market Expecting Further Fall on Friday

US unemployment claims kept falling yesterday with a drop in continuing claims for the previous week to 751,000. This is the lowest number since the pandemic began and the figures manages to positively boost the equities market yesterday after a torrid week on Wall Street.

Early futures trading for the day ahead though suggests that more losses could come when the markets open today. The Dow Jones is currently trading down more than 500 points in the futures market along with dips in both the NASDAQ and S&P 500. This comes even as many of the big tech names beat earnings estimates except Apple and Twitter, both falling short of analyst expectations.

 

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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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