Euro continues winning streak

Posted 20 December, 2018

The euro has been strengthening this week with a good leap being recorded in the second half of the week. Following some decline, the bullish players keep pushing for the rise. The euro-to-US dollar exchange rate broke the $1.14-handle touching some 1.1472 near the 100-day moving average. As a result, buyers have calmed down somewhat.

The observed upturn is also bolstered by the factors that boost euro positions but affect dollar's ones. Specifically, positive news came from Italy – Rome and Brussels eventually managed to come to terms on the 2019 draft budget. As a result, Italy will not face sanctions, though this costed certain concessions for the government. The budget deficit target was downgraded to 2.04% (2.4% earlier) and the GDP outlook – 1% (1.5%). The reforms are said to be of stripped-down nature. As a result, this is definitely a big win for the European currency especially after investors included an escalation of the Italian budget issue into the price.

Meanwhile, the greenback is losing grounds on all fronts. The negative dynamics is seen even despite the statements of the US Federal Reserve that turned to be less bearish than expected by the market. According to the market analysts, the US dollar is slackening on its plunge vs the Japanese yen, while additional pressure is coming from the downgraded outlook of the 2019 interest rate revision (from 3 to 2 times). At the same time, it is quite possible that the US dollar bulls consider this move of the US Federal Reserve indicates that it does not want to admit the need for a showdown next week.

The euro is getting support anyway. However, there is one more challenge ahead – economic reports from the USA to be released this Friday. 

Previous 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

Next forecast

18 December, 2018 15:01

Sterling posts gains on Tuesday →

On Tuesday (December 18) the sterling is gradually restoring positions vs the greenback with the exchange rate reaching some $1.2680 now. The positive dynamics of the British currency is related to one and the same issue – Brexit voting in the UK parliament. It has been reported lately that the previous vote scheduled on December 11 was cancelled, while the new date has been slated for January 14. It is interesting what tactics Theresa May may choose this time.

Sterling posts gains on Tuesday
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