USD/EUR goes down 0.1% – but hope hovers for greenback

Chris Lee

The US dollar started this week in a mixed way after it declined in some of its major pairs but rose in some others.

The currency faced a complicated backdrop of coronavirus-related problems and divergent approaches from national governments – as well as the impending commencement of a major economic summit.

The dollar was down against the single European currency, where it reached 93.105 at one stage.

Several government leaders in Europe appear to be against the possibility of reimposing pandemic lockdown measures.

In Italy, for example, authorities have confirmed that there will not be a second lockdown – even though the country, which was one of the worst hit originally, is now seeing some further rises in cases.

In terms of the world’s riskiest currencies, the dollar again faced a mixed picture.

The Aussie dollar was up by just over a fifth of a percentage point in its greenback pair, reaching 0.71785.

It even managed to resist a gloomy prediction from the Australian government, which appeared to suggest that unemployment levels in the nation were set to skyrocket.

Over the water in New Zealand, however, there was a different story.

The government there has been grappling with a new outbreak of the coronavirus, and the day began with the country’s Prime Minister announcing that lockdown measures in the country’s main city of Auckland would be boosted.

Jacinda Ardern also said that the wearing of masks was now essential everywhere across the country.

The New Zealand dollar saw its fortunes decline after this, with the currency down by 0.1% in its greenback pair.

There is a widespread perception in the markets that the introduction of lockdown measures, even if necessary, have significant economic effects.

Currencies have tended to do badly in the immediate aftermath of announcements like these.

Perhaps the main reason for the dollar’s relative unpredictability, though, lies in the fact that this week will see some significant moves when it comes to central banker speeches.

The Jackson Hole Symposium, which is a major gathering of many of the world’s leading monetary policy figures, will occur later this week.

This means that there are more speeches on the economic calendar than usual both at this event and others.

Hitoshi Suzuki, who sits on the Policy Board of the Bank of Japan, will speak on Thursday at 1:30am GMT.

On the same day, there will be a speech from Jerome Powell, who chairs the US Federal Reserve, at 2pm GMT.

Aside from global affairs, US domestic politics continued to influence the performance of its dollar.

Some analysts suggested that President Donald Trump may have cynically arranged an announcement related to a potential medical solution to the coronavirus.

Trump, who is running for re-election in the general election scheduled for this November, is set to be formally nominated as the Republican Party’s candidate for President.

Risk Statement: Trading Foreign Exchange on margin carries a high level of risk and may not be suitable for all investors. The possibility exists that you could lose more than your initial deposit. The high degree of leverage can work against you as well as for you.

Chris Lee
Blackbull LogoYour capital is at risk
  • User-friendly platform with great trade-analysis tools
  • Leverage Up To 1:500
  • Spreads as low as 0.00 pips
  • Quality trade execution thanks to high-spec IT infrastructure
  • $0 minimum account opening balance
  • 26,000 tradeable instruments
  • Not available in all jurisdictions
  • Regulatory infrastructure
tickmill_logo-173% of retail CFD accounts lose money 73% of retail C...
  • Well regulated
  • Ultra-fast and high leverage trading
  • Spreads as low as 0.0 pips
  • Comprehensive research tools
  • Relatively limited number of markets
  • Does not accept US traders
Your capital is at risk Europe* CFDs ar...
  • Multi-asset broker offering a wide variety of markets
  • Strong regulatory framework
  • Innovative risk management tools
  • Choice of market-leading platforms
  • Wide spreads on some markets
  • Expiry date on Demo Accounts
Between 74-89% of CFD traders lose Between 74-89 % of retail investor accounts lose money when trading CFDs
  • Low trading costs
  • Great market flow
  • Research and analysis which helps spot trades
  • Wide range of Copy and Social Trading options
  • Limited range of non-forex markets
eToro Logo77% of CFD traders lose 77 % of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.
  • Social and Copy Trading Platform
  • Beginner Friendly
  • Risk-free Demo Account
  • Top-tier regulation
  • Limited means of raising queries
  • Withdrawal process isn’t really ‘client-focused’