Dollar weaker, euro yet to respond to ECB bearish signals

Posted 27 December, 2018

The US dollar failed to show a long-term rebound. Seeing stock market upturn in the USA, the dollar soared against the majors, but later lost the pace and resumed the weakening. Moreover, investors are run out of the steam as well. Asia posted mainly negative market developments amid skyrocketing Wall Street indices. At the same time, the European indices were differently directed, which confirmed the technical nature of the recent decline on oversold currency, as market analyst believes.

The greenback is now sliding against the majors. At the same time, the euro keeps rising to the 1.14 handle despite mostly bearish sentiments in the economic report of the European Central Bank. The regulator stated expanding downward risks for the regional and global economies.

In this situation, it seems that the European Central Bank is getting ready to change its position regarding the interest rate revision, which means that the first increase can be delayed in 2019 citing economic signals. This can be confirmed by the recent message of the regulator saying that the European economy still needs large-scale stimulation.

As a result, the bank's pessimism can affect the euro unless the greenback faces complete suspension of the interest rate rise in 2019.
Speaking about the near term, the euro is about to focus on the market sentiments along with the Italian issue – budget voting must be held until December 29.

Previous forecast

03 January, 2019 16:45

← First week of 2019 marked by hikes of Japanese yen

​The Japanese yen has posted strong upturn against the majors in the first week of 2019. At the same time, the observed hikes hardly can be connected with the moves of BOJ, especially given that Tokyo does not want to get soaring national currency. Along with other reasons, higher Japanese currency can be explained by stronger demand for protective assets, with the Japanese yen being among the safe havens, amid the recent downgraded revenue report by Apple.

First week of 2019 marked by hikes of Japanese yen

Next forecast

26 December, 2018 17:16

Euro to US dollar rate fluctuates near 1.14 handle →

The euro posted some gains at the morning trading today. Moreover, euro bulls even managed to offset some decline faced a day earlier. In general, the euro-to-US dollar started following moderate downward trend yesterday. Trading was slow due to the Christmas holidays and the market saw no economic reports from the USA and the euro-area either.

Euro to US dollar rate fluctuates near 1.14 handle
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