EUR/USD has been shrugging off cautious words from central bankers and extending its gains. Coronavirus headlines and speculation about the next stimulus boosts are eyed on Wednesday, Yohay Elam, an Analyst at FXStreet, reports.
Key quotes
“A coronavirus vaccine is no game-changer for forecasts – the words of Christine Lagarde, President of the European Central Bank, poured some cold water on investor enthusiasm. The ECB already incorporated immunization from the virus in 2021 as part of its outlook and remains worried about the current spread of the disease. Jerome Powell, Chairman of the Federal Reserve, echoed her cautious words.”
“Vaccine news keeps investors upbeat. Pfizer and BioNTech, which were the first to report efficacy in a Phase 3 trial, announced they passed a key safety milestone. The firms are set to seek Emergency Usage Authorization for their inoculation shortly, aiming to administer the vaccine in December.”
“In the eurozone, there are tentative signs that the covid curve is turning a corner, perhaps opening the door to easing restrictions in some countries.”
“Lagarde stated that additional stimulus is coming, while Powell only opened the door to a potential expansion. If the Fed proceeds with another boost, EUR/USD has room to rise.”
“Final eurozone inflation figures for October will likely confirm the drop of 0.3% in the headline Consumer Price Index. US Building Permits and Housing Starts are eyed in the US on Wednesday. However, the focus is on the virus and central banks.”
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