- 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.[table “14” not found /]