EUR/USD has been grinding its way lower, currently at 1.1264, after long days of gains. The Fed is set to certify its commitment to the economy fueling the pair while the EU leaders adopting fiscal stimulus should favor Euro/Dollar too, according to FXStreet’s analyst Yohay Elam.
Key quotes
“The Fed announced further accommodation – loosening its conditions for loans in the Main Street program. The move contributed to the S&P erasing its losses for the year and weighed on the greenback. It came ahead of Wednesday’s rate decision, where the Fed will publish new forecasts and probably reiterate its commitment to the economy, potentially helping EUR/USD advance. Jerome Powell, Chairman of the Fed, will probably be asked about asset valuations. If he tries to cool markets, the dollar may recover.”
“Christine Lagarde, President of the ECB, urged European leaders to adopt the EU Commission’s large stimulus program. If the ‘Frugal Four’ – Austria, the Netherlands, Denmark, and Sweden – succumb to pressures from larger countries, the common currency has room to rise. If they insist on changes, the euro may struggle.”
“Racial tensions remain high on the political agenda in America and have somewhat weighed on President Trump’s approval rating. However, investors have returned to focus on fiscal and monetary stimulus for now.”
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