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Forex Market Support Continues on Record Day

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Forex Market Support Continues on Record Day
  • Euro Remains Positive as US transition Begins
  • GBP High But Stuck on Brexit Uncertainty
  • Markets Look to Follow Huge Day

Optimism continues to be the keyword in the forex market and economy in general for this week. The Euro in particular has held up well amid the positive backdrop of a progressing US transition and vaccine developments. The Pound remained steady approaching $1.34 but is being held back by yet more Brexit uncertainty. This all comes as US markets look to continue from a record-setting day yesterday when the Dow Jones broke through 30,000 for the first time.

Euro Stays Hopeful on Various Fronts

Buoyed last week by continuing positive vaccine news, the Euro retained strength above $1.19 yesterday and is moving strongly into today’s session. This risk-on mood is further backed by the announcement that President-Elect Joe Biden has received the green light to transition into the White House and announced his top team moving forward.

There remains a strong appetite for the Euro as many forex brokers note a move away from the safe haven US Dollar on the more optimistic outlook. Data to be released later today includes the latest figures for US Durable Goods Orders and more. This data depending on how it comes in may increase desire for the Dollar and detract slightly from the Euro as the Bloc still battles to contain the coronavirus and has the cloud of Brexit looming large in the coming weeks.

Sterling Steady but Awaiting Brexit Developments

The Pound has also largely benefitted from a more risk-on approach of those forex trading in recent weeks. This has managed to keep it quite strong above the $1.33 mark despite the Brexit turmoil going on domestically for the UK.

Deadlines have come and gone. Talks have been ongoing but resulted in nothing but an impasse. It now looks increasingly unlikely that any kind of deal can be done on post-Brexit trade. This is aside from any economic data and an environment where the UK faces their heaviest borrowing costs in decades yet must press ahead with spending. The first comments of new US President Biden will also have done no favors to any deal that changes the UK/Ireland border situation with the President-Elect being very much in favor of a border that remains open.

Wall Street Looking to Follow Record Day

It is fair to say that US equities markets reacted favorably to the news of a peaceful US transition beginning yesterday. The Dow Jones surged past 30,000 points for the first time ever and looks set to record their best month since 1987 with a 13% monthly increase to date.

This positive surge looks to be continuing as the futures market sets a positive tone. Early trading has the index rising another 100 points on the opening bell. The S&P 500 also closed Tuesday at another record high with the market overall capturing the very positive sentiment of investors at the moment.

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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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