EUR/USD is trading around 1.17, at the bottom of the recent range. The steep increase in coronavirus cases in Europe is likely to keep undermining the euro while speculative interest fears an even slower economic comeback as restrictive measures returned. There are high chances that the ongoing risk-averse scenario extends this week, as the issues continue to escalate, FXStreet’s Chief Analyst Valeria Bednarik briefs.
Key quotes
“US Treasury Secretary Steven Mnuchin and House Speaker Nancy Pelosi have had different talks these days, but were still unable to agree. They are quite close, but Pelosi noted that testing is one of the main issues remaining in talks. The blame-game continues, and at this point, it seems unlikely they would be able to clinch a deal before the presidential election.”
“New coronavirus contagions have been rising exponentially in Europe. On Thursday, the Old Continent reported over 153K new COVID-19 contagions, with Spain, France, the UK, Italy and Germany reporting the most cases. Just France reported a record of over 30K new cases in one day. That led to a curfew in the country starting this Saturday, although several other countries are imposing tough restrictive measures. Financial markets are concerned these measures will further delay the already tepid economic comeback.”
“The market paid little attention to macroeconomic data, which was overshadowed by the ruling negative sentiment. Still, data has been worrisome, reflecting a slowing growth pace. In terms of macroeconomic releases, this will is quite light. The most relevant figures will be published on Friday, as Markit will publish the preliminary estimates of its October PMIs for the EU and the US. Also on Friday, US President Donald Trump and his Democrat rival, Joe Biden, will participate in their last presidential debate.”
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