- EUR/USD Trading Near Lows
- Fed News of Tapering a Key Driver
- Wall Street Sell-Off Continues
The Euro forex market is again trading towards monthly lows. This marks the third consecutive day that the pair has done so. This failure to gain any positive momentum may be firmly put at the door of the Fed with a policy decision and press conference looming. There is a major focus on this as many try to get a gauge for whether Jerome Powell will continue his supportive stance. This all arrives amid the backdrop of a strong sell-off on Wall Street that started the week. This continued into the Tuesday session as the street looks to rebound today.
EUR/USD Hit for Another Day
There has been a little pullback overnight in terms of US Dollar strength. This is nothing close to what is needed from a Euro perspective though. Almost all of the determining factors with the current weak period for the Euro are stemming from the US or even further afield.
Key news for the week that could have an impact on the common currency beyond what is happening in the US includes the German election. The people go to the polls to vote on Sunday with inflation running high in the bloc, and the economic roadmap ahead being among the key concerns for those voting and forex trading alike. It seems increasingly likely that center-left candidate Olaf Scholz will emerge with the victory which does not appear the preference for many with an economic focus.
Federal Reserve News Key to Week
The Federal Reserve and Jerome Powell will hold a press conference today that could turn out to be a key driver for the rest of the week and further ahead for traders and forex brokers alike. It now seems increasingly unlikely given softer than expected inflation data and the current state of the market, that tapering plans will be announced.
Instead, Fed Chair Powell is widely expected to continue his current supportive stance. Many around the industry know though, that this strategy cannot continue forever. To this end, most will be focused on the wording, and eager to gather information on when tapering will start to take place along with any potential interest rate hikes.
Stock Recovery Efforts Continue
Markets on Wall Street look set to move into mid-week still in search of a positive day to begin something of a recovery following a tough start to the week. Monday saw a widespread sell-off and the worst day in markets since May.
A positive pre-market was not enough to get things back on track yesterday as numbers continued downward across the board. As well as an eye on the Fed decision, the market also seems to be dealing with some overspill from the Evergrande crisis in China. Though the property giant may not be in as bad a position as first anticipated, the situation has created a ripple of concern beyond Asia.