- EUR/USD Hits Two Week High
- GBP/USD Also Moving Amid Positive Market
- Market Awaits Important US Testimonies
Major markets and forex trading worldwide were encouraged by a strong market comeback to start the week. In the US, the Dow Jones surged more than 900 points on Monday. This marked a significant gain and shift in sentiment. The move has given life to both the Euro and British Pound markets with the Dollar as traders begin to sense some positive light breaking through the Coronavirus crisis. Asian markets followed the American lead on Tuesday with some substantial gains noted.
EUR/USD Forex Market Breaks Out of Slump
The Euro has been held down by negative data and risk-off sentiment for the last couple of weeks, trading below $1.08 at some points. Following yesterday’s rally though, the pairs has traded toward a 2-week high of $1.095. This is seen as positive news for the Euro after a turbulent couple of weeks. It comes off the back of more positive data coming from Germany with their ZEW indicator of market sentiment surpassing expectations in the correct direction.
A virtual meeting of the EU finance ministers later today will also have the interest of traders in the forex market. A positive tone from this, and more measures to help the struggling economies of the bloc such as the European recovery fund which has already been proposed, could give the market further strength moving through the week.
Sterling another Beneficiary of Improving Mood
Along with the positive market push, the GBP/USD has also seen some benefit, today sitting around the 1.22 mark amid the more positive market sentiment than in previous weeks. This may have come yesterday as a much needed boost for the Pound. Employment data to be released later today could weigh heavily on the currency with forex brokers anticipating an anxious day from British traders.
Much of the positive swing from yesterday’s markets worldwide came off the back of positive signs from Moderna and the early stage human trial of the coronavirus vaccine. These trials managed to produce Covid-19 antibodies in all of the 45 participants of the trial. This sent a positive wave through the markets, and gave the companies own shares a 20% boost on Monday.
All Eyes on Powell and Mnuchin Testimonies
Whether or not the wave of positive market sentiment is to continue today could rest largely on the testimonies of Federal Reserve Chairman Jerome Powell, and Treasury Secretary Steven Mnuchin. They are both set to brief congress today on the state of the economy in response to the coronavirus.
Fed Chair Powell is expected to reinforce remarks made yesterday that the Central Bank has plenty of power left to support the economy. He has also indicated that the Fed remains wholly committed to using any means appropriate to support the economic challenges ahead. These kind of bullish remarks may be just what the forex market and others need to hear to continue the positive momentum.
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Dollar Weakness Continues in Forex Market Despite Positives
- GBP Gains on USD Despite Huge Employment Drop
- Hopes Build For Airline Bailout as Stocks Surge
- Putin Claims Russian Victory in Vaccine Race
Even after revealing the largest quarterly employment drop in more than a decade, the GBP forex market managed to continue gaining ground on a US Dollar displaying weakness. More than 94,000 new unemployment claims were lodged in the UK for July alongside the employment drop. The currency weakness though has not negatively impacted Wall Street as stocks push for an eighth consecutive day of gains. It has also been widely reported that Russian leader Vladimir Putin has claimed his country to have developed the first coronavirus vaccine, with his daughter being among the initial recipients.
10-Year Record Employment Drop in UK
Employment numbers in the UK have seen their largest quarterly drop since 2009. This comes as the figures show there are 220,000 less people in employment than the previous quarter. The number of people in receipt of unemployment benefit has also seen a sharp rise of more than 100% over the same period, standing at 2.7 million people. The overall unemployment rate stands at 3.9% though this is not reflective of the situation on the ground where millions remain backed by government fiscal measures.
Still these dire numbers have not taken a toll on the Pound to date. This is due to an ongoing combination of US Dollar weakness combined with a prevailing optimism from the Bank of England that they will continue to support the economy if is encounters another stumbling block. Those forex trading the may also be buoyed by a renewed positive push on Wall Street which has pushed many away from the safety of the US Dollar.
Possible Bailout Helps Airline Stocks to Soar
Despite still being down record numbers, the fact that the TSA has clocked air travel at its highest rate since March was good enough for airline stocks to rise strongly in trading on Monday. This is a positive sign of a return to some degree of normality for a sector which has been hugely hampered by COVID-19.
Forex brokers were not the only ones to note strong activity in certain markets. Stock traders continued to push flagging airline stocks back up yesterday as support continued to grow for a new stimulus package to help the industry in the amount of $25 billion in federal payroll backing for airlines.
Russia Declares Successful Virus Vaccine Development
Despite some skepticism, Russian President Vladimir Putin has announced that the country has successfully developed the world’s first coronavirus vaccine. With many countries racing through trials to develop a vaccine, this would be a landmark achievement for Moscow.
He has also reported that one of his daughters has successfully received the vaccine. There are plans for mass vaccination to begin early next year. There are still widespread concerns that the virus may not have been fully tested, but the news is sure to stir a global reaction as markets on Wall Street open in search of another success day with futures trading positively.
Forex Market Majors Boosted by Positive Data
- US Jobless Numbers Drop as Euro Reach Highs
- Interest Rate Hold Helps GBP/USD
- Markets Wait on Stimulus Bill Update
Both the Euro and the Pound were given a timely boost against the US Dollar as unemployment numbers in the US came in much lower than expected. The number of new claims filed dropped almost 250,000. Sterling has been boosted further by the news that the Bank of England will leave interest rates unchanged for now. This positive news has not though impacted the opening on Wall Street as traders hold out for more news on the proposed stimulus deal.
Better Than Expected Unemployment Data Provides Confidence
Although unemployment numbers are still easily at record-setting numbers, there are continuing signs of movement in the right direction as the number of weekly claims has continued to trend downward, albeit against the expectations of analysts. They had forecast a figure above 1.4 million, though the number which came in is far below that at 1.186 million.
Continuing claims have also dropped by more than 800,000 and while there is still a great distance to go, traders and the forex market alike have been quick to take the positives from the situation. The EUR/USD market quickly moved to a new two-year high above 1.19 though this has since dropped back closer to 1.185 as many forex trading the pair await the outcome of the proposed second stimulus package for the US economy.
Pound Receives Boost from BoE
The Pound has been trading well in recent days, shaking off concerns over the stalling Brexit negotiations and a step back in the UK lockdown reopening process to gain further against a weakened US Dollar. It was further aided today by news that the bank will not move to negative interest rates at any time in the near future.
Although a positive message was taken by traders, and forex brokers noted an uptick in trading of the Pound, Bank of England Governor Andrew Bailey was also quick to warn that this should not be perceived as an optimistic outlook, and that the bank will continue to monitor developments closely. In other positive developments though, they also revised GDP projections to predict a 2020 contraction of 9.5% instead of the previously estimated 14%. This has all left the GBP/USD trading above 1.315, having hit a multi-month high.
Quiet Market Opening as Stimulus News is Awaited
Despite the drop in unemployment numbers, markets on Wall Street opened quietly on Thursday. This follows recent days of strong gains with the S&P 500 ending yesterday within 2% of its all-time high level.
Many traders are poised and waiting for further news on the new coronavirus stimulus package which has so far failed to overcome an impasse with lawmakers in Washington. It seems that several concessions have been made in a bid to get the package passed, though there still appears to be a gap between what is being proposed, and what some feel is appropriate.
GBP/USD Forex Market Eases Off Amid Continuing Virus and Trade Concerns
- Pound Fails to Further Capitalize on Weak US Dollar
- EUR/USD Also Trading Sideways as PMIs Improve
- American Markets Continue to Improve
Having rallied well in recent days and weeks, the GBP/USD market is now trading back at reasonable numbers previously seen before the COVID-19 pandemic. The pair has dropped back slightly though on Tuesday as concerns continue on a number of fronts. The Euro is also following a similar pattern as the US yesterday released rebounding PMI figures. The major US indices are bouncing back too. They opened with a third consecutive daily gain.
Traders Worried About Possible Pound Retreat
The Pound has been making significant gains as the US Dollar weaknesses have been highlighted in recent days and weeks. That looks set to end today though as the currency slipped back to $1.30 on the charts. Those forex trading in the market are concerned as trading patterns indicate a ‘dead cat bounce’. Namely this is a heavy drop, followed by a short recovery, before another large fall.
This would appear slightly pessimistic, though forex brokers too have noted that the UK in particular faces many challenges on the horizon. These include not only a rising number of coronavirus cases as PM Boris Johnson has moved to scale back reopening processes, but also some ongoing, and increasing tensions between the UK and China, particularly over Hong Kong related issues. These combined with a lack of movement in regard to Brexit talks, could really work to stop the Pound in its tracks.
Euro Market Remains Unchanged After Opening Boost
The EUR/USD had started the day off strongly, but it too has been pegged back to around its opening mark. There are a couple of factors likely at play here. The move is more related to increasing US Dollar strength, than any Euro weakness.
US manufacturing sector PMIs yesterday rebounded to a 16 month high when numbers were released. The figure of 54.2 was impressively higher than predicted, while the new orders index also continued to surge in the right direction at 61.5. This will have strengthened the Greenback in a positive sense, while the continuing talks on another economic stimulus plan in the US have also worked to drive many traders back to the safety of the Dollar for the time being.
Continuing Talks Help Boost US Markets
These same continuing talks have given a sense of hope to the stock markets as all major US indices opened higher on Wall Street for the third consecutive day. This comes as news continues to filter out about ongoing discussions for further stimulus which have been described as productive.
Both sides at the moment would appear to have agreed on another $1200 stimulus, though there remains some stumbling blocks to overcome. This would surely boost the market at least in the short term and the optimism has been reflected in trading over recent days with gains in many hard hit sectors of the stock market such as airline travel as investors regain hope.