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EUR/USD has been under pressure as US yields hold high ground. The euro is set to dive as vaccine chaos, Turkish turmoil and some Fed hawkishness are weighing on the pair, Yohay Elam, an Analyst at FXStreet, reports.

See:  EUR/USD to push back to the 1.20 mark – Rabobank

Key quotes

“Rising coronavirus cases in Germany have prompted Chancellor Angela Merkel to suggest a four-week extension to the nationwide lockdown. Europe’s largest economy would be joining France, which imposed new restrictions on around 20 million citizens. Most of Italy has gone silent amid a new shuttering.”  

“The EU is far behind the US and the UK in its vaccination campaign and frustration has not only led to protests, but also to potential blocking of vaccine exports. Brussels is set to prevent AstraZeneca doses made in the Netherlands from crossing the Channel to Britain. Officials are set to review all outgoing shipments, claiming the pharmaceutical firm has not fulfilled its obligations to the bloc.”  

“Turkey’s President Recep Tayyip Erdogan sacked the governor of the central bank, causing a downfall in the lira and sending shockwaves in other places. The safe-haven dollar is receiving some demand.”  

“Jerome Powell, Chairman of the Federal Reserve, is set to speak on Monday in the first out of three public appearances. If he continues dismissing rising returns on US debt, the dollar may continue rising.”  

“The White House is already mulling new plans. According to reports from Washington, the new program will likely consist of infrastructure spending and also tax hikes. While higher revenue for the government means less debt issuance, a potential market-unfriendly move could weigh on stocks and boost the safe-haven dollar.”