EUR/USD has been holding up on hopes for US fiscal stimulus and despite rising eurozone cases but an adverse headline from Washington and dovish European Central Bank (ECB) comments could bring the pair down, FXStreet’s Analyst Yohay Elam briefs.
Key quotes
“President Donald Trump seems to be recovering from COVID-19 – and EUR/USD should probably focus more on rising cases in the old continent. Germany reported over 4,000 daily cases, the highest since April. Jens Spahn, Germany’s Health Minister, said the infection numbers are worrying. Berlin already imposed restrictions, following Paris and Madrid – the latter capital living in lockdown.”
“Stocks are on the rise and the safe-haven dollar is broadly lower as US lawmakers continue exchanging ideas – at least publically – for another stimulus package. Trump cut off talks on Tuesday, rejecting the Democrats’ $2.2 trillion proposals but he has since offered piecemeal suggestions. Dems, leading in the polls, are unlikely to cede ground after the president’s abrupt move, leaving room for adverse headlines and a strengthening of the greenback.”
“Vice President Mike Pence and Senator Kamala Harris clashed in the Vice-Presidential debate. The encounter was far more civilized than the presidential one and focused on the topics. It is hard to say who won, as both candidates repeated known attack lines and focused on their rival’s bosses rather than on themselves.”
“The European Central Bank’s meeting minutes are due out later on Thursday. They may shed light on the clash between the doves – who advocate more stimulus amid rising COVID-19 cases – and hawks, who prefer waiting for now. Luis de Guindos, Vice-President of the ECB, insisted that the bank still has firepower.”
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