EUR/USD has been consolidating its gains around 18-month highs amid cautious markets. EU recovery fund, cautious optimism on COVID-19 and US fiscal stimulus could push the pair higher, FXStreet’s analyst Yohay Elam reports.
Key quotes
“The common currency surged in response to the EU fund. Despite some analysts pointing to the ‘devil in the details’ and potential hurdles in national parliaments, most agree that debt initialization is a substantial leap forward in the union, and could also encourage private investment. Christine Lagarde, President of the ECB, will speak later in the day and will likely praise leaders for their achievement.”
Speaker of the House Nancy Pelosi and Treasury Secretary Steven Mnuchin have been leading bipartisan talks for another relief package – days ahead of the expiry of federal unemployment benefits. Both sides have been cautiously optimistic, but talks could go down to the wire.
“The AstraZeneca/ University of Oxford effort promises ‘double protection’ – both developing antibodies and T-cells – but several scientists curb the initial enthusiasm about that project. Further medical headlines may rock currencies. The safe-haven dollar may benefit from downbeat news and fall if progress is reported.”
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