TEHRAN (Iran News) – Euro/dollar’s consolidation may be coming to an end as worries about the virus, US stimulus, and Brexit are holding the EUR/USD pair back. After two injections of hope – a favorable ECB decision and vaccine approval progress, additional developments are awaited, FXStreet’s Analyst Yohay Elam reports.
“The European Central Bank (ECB) announced a €500 billion expansion of its Pandemic Emergency Purchase Program (PEPP) as expected, but surprised by extending the program through March 2022. In parallel, the EU finalized the multi-year budget after a compromise with Poland and Hungary. Christine Lagarde, President of the ECB, said that the bank is monitoring the exchange rate, but did not offer starker language meant to push the euro lower. Her lack of urgency on the topic also allowed the common currency to rise.”
“EUR/USD needs to clear some clouds to continue the rise toward 1.22”
“The US Food and Drugs Administration recommended approving the Pfizer/BioNTech coronavirus vaccine. The American regulator is considered the global ‘gold standard’ and should accelerate injections worldwide.”
“Senate Majority Leader Mitch McConnel remains reluctant to give his blessing to new stimulus worth around $900 billion. Proposals from a bipartisan group of senators and the Treasury seem stuck in the mud. The safe-haven US dollar may gain further ground if the progress made earlier this week fully stalls.”
“EUR/USD needs to clear some clouds to continue the rise toward 1.22”
“The EU and the UK are preparing for a no-deal Brexit, and that is weighing on the euro. The bloc announced a contingency plan in case deliberations hit the Sunday deadline without a breakthrough. UK Prime Minister Boris Johnson said there is a ‘strong possibility’ of leaving on ‘Australian terms’ – a code for no accord.”
“Euro/dollar is set to move to the tune of talks in Brussels and Washington and also to watch US data. The University of Michigan’s Consumer Sentiment Index is set to edge down from 76.9 to 76.5 points in December.”
- source : FXSTREET
