- Euro Hits Back Despite Negative ECB Comments
- Pound Strengthens but Still Hurting From Brexit
- US Markets Improve on Trump White House Return
It has been nothing short of a rollercoaster few days for the forex market, and traders in general. The big movement back toward the safe haven dollar has been averted, and many traders have taken up both the Euro and Pound. This has led to renewed strength from both even in the face of their own challenging times. US Markets are also looking positive for a second consecutive day as talks over another stimulus package continue.
Euro Stronger Despite ECB Presidents Warning
Forex brokers noted a strong uptick in Euro trading over the last 24-hours. The pair had been languishing close to $1.16 in the immediate aftermath of the Trump coronavirus diagnosis, though it has jumped back to a recent high above $1.18 today. This move brings the pair back to highs which have not been seen in the last couple of weeks.
While those forex trading the pair remain optimistic, the message from the ECB and its President Christine Lagarde, is decidedly more cautious. She has warned that the V-shaped recovery many had hoped for still looks very uncertain. This may well prove to be the case, with the ongoing issues around coronavirus still causing havoc in Europe. France are among several of the countries to have recently tightened restrictions as the case count rises.
Brexit Trade Uncertainty Continues to Dent Sterling
Positive data from the UK, combined with renewed hopes of a Brexit trade deal have brought the Pound back from the doldrums is has recently encountered. The weakening of the US Dollar again followed by an upward revision on British PMI numbers has returned some positivity to the GBP market. UK leader Boris Johnson has also agreed to speak with the President of the European Commission in a move which many will see as a hopeful step toward agreeing a Brexit trade deal.
This same deal though, is exactly what is tempering expectations on the Pound. Precisely, the UK Internal Market Bill which would see significant changes to the initial Brexit deal, has been a huge problem. The EU have referred to this bill as a “blow to trust”, and many in the UK have also acknowledged this as a breach of international law.
Markets Boosted Again on Stimulus Possibility
Following a drop off when the President initially tested positive for COVID-19, US markets have mounted something of a comeback. This has continued today with the Dow Jones opening positively for the second consecutive day.
Much of the positivity is centered, not around the return of Donald Trump to the White House, but instead on the continuing possibility of another US stimulus package. This would boost the economy and markets further, and although Democratic Speaker Nancy Pelosi, and Treasury Secretary Steven Mnuchin could not reach a deal on Monday, they did agree to continue talks. This is proving enough to give trading a much needed boost.