- EUR/USD rallies for the fourth consecutive day to hit one-month highs at 1.1880.
- The US dollar dives amid hopes of a US COVID-19 stimulus deal.
- EUR/USD might appreciate to 1.20 in December – Danske Bank.
The euro has rallied for the fourth consecutive day against the US dollar on Wednesday, extending its recovery from last week lows at 1.1685 to one-month highs near 1.1900.
Euro appreciates on US dollar weakness
The common currency has rallied nearly 0.5% so far today, with the US dollar trading at multi-week lows after US President, Donald Trump, suggested he is ready to accept a large coronavirus-relief package. This has boosted investor’s optimism which has favoured riskier currencies, increasing negative pressure on the dollar.
The White House spokesperson, Allysa Farah affirmed she is optimistic about the fiscal deal and President Trump suggested that he would be willing to agree on the $2.2 trillion bill proposed by the Democrat party. Trump’s position, however, contrasts whit that of the Senate Republicans who have made public their opposition to a large bill.
EUR/USD seen at 1.20 in December – Danske Bank
In a mid-term perspective, the FX analysis team at Danske Bank observes the euro marching towards 1.20 in December: “A Brexit solution, a Biden win and an EU budget agreement may culminate in December to move EUR/USD to 1.20, which remains our best (and base) case scenario. There is a risk we are too optimistic and if we do not see improvements over December, we expect to shift our one-to-twelve month profile (currently 1.20 on six-month) in favour of USD.”
Technical levels to watch
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