Connect with us


Rising Virus Cases Continue to Impact Forex Market




  • Lockdowns Hamper Any Euro Recovery
  • USD Strength Diminishes on Infrastructure Bill
  • Stock Recovery Continues into Easter Break

The forex market continues to feel the weight of COVID-19. This is particularly true for the Euro as countries across the block battle with rising case numbers and restrictions start to come back into focus once again. Massive infrastructure spending plans presented in the US meanwhile seem to have steadied treasury yields and with that, the Dollar has stepped back slightly while Wall Street continues to recover from the Archegos debacle and looks to be heading into Easter on a positive turn.

Euro Weakens as More Nations Lockdown

France has joined European neighbors Germany, and Italy in imposing renewed lockdowns as COVID-19 cases continue to move higher. This comes much to the dismay of Europeans hoping to move in the opposite direction and to those forex trading the Euro alike. The currency, which has not seen much positive movement for quite some time, continues to toil beneath multi-month lows today under $1.175.

France will enter a month-long lockdown period as the entire continent still continues to grapple with an extremely slow vaccine campaign. A very low percentage of the population has so far been vaccinated amid a host of rollout difficulties including an international spat with the UK. Even so, British vaccines continue to find their targets and the Pound has been a beneficiary, moving back in the right direction against a weaker Dollar.

USD Dips Following Infrastructure Bill Announcement

President Biden introduced plans to overhaul US infrastructure in a major way this week. He did so with a calculated plan that includes massive spending to the tune of more than $2 trillion in total. The cost though would seem to be spread out over many years, and so reduce the need for borrowing to fund the plan. This helped ease off treasury yield that had spiked pre-speech, and a Dollar that had gained strength.

With these factors giving way, there was more movement away from safe-haven assets including the Dollar, yet investors are still remaining cautious. The prospect of large tax hikes that could be needed to cover such expenditure is something to watch out for and could play a key role in future movements.

Stock Recovery Continues in Wake of Sell-Off

While forex brokers digested the news and impact of infrastructure plans, the impact was felt for some related names on Wall Street with numbers picking up. Key here though has been a move back to positivity following the chaos surrounding Archegos Capital. Key indices including both the Dow Jones and NASDAQ have posted gains in recent days as traders show their own steel.

Core stocks involved in the huge forced sale including many large Chinese names have also appeared to stabilize. These factors combined with the prospect of further easing Treasury yields and another expected drop in jobless figures could send the street into Easter break on a high note.

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.

Advertiser Disclosure: is committed to rigorous editorial standards to provide our readers with accurate reviews and ratings. We may receive compensation when you click on links to products we reviewed.

ESMA: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Between 74-89% of retail investor accounts lose money when trading CFDs. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

Investment advice disclaimer: The information contained on this website is provided for educational purposes, and does not constitute investment advice.

Trading Risk Disclaimer: There is a very high degree of risk involved in trading securities. Trading in any type of financial product including forex, CFDs, stocks, and cryptocurrencies.

This risk is higher with Cryptocurrencies due to markets being decentralized and non-regulated. You should be aware that you may lose a significant portion of your portfolio. is not a registered broker, analyst, or investment advisor.