FOREX MARKET

Forex Markets Undisturbed by US Unemployment Data – Securities.io


  • Euro Recovering But Still at Very Low Point
  • GBP Also Weak as Market Awaits Key Announcements
  • Markets Continue to Recover Despite Recession Fears

Both the EUR and GBP continued to improve slightly on Monday, though still not back to the levels of even a week previous. Both are very much reactive to the US Dollar at the moment, with most forex brokers still noting a desire to stay within the safe haven currency. The Euro still lies below the $1.08 benchmark while the Pound similarly remains below the $1.24 mark despite a slow increase.

Euro Market Hinges on ECB Actions

One of the major points which hit the Euro hard toward the end of last week was the lack of more direct action from the ECB to further stimulate the economy. This was compounded by the ruling of the German Constitutional Court last week which stated that the stimulus program already put in place by the ECB, violated German law.

With this, and a relatively quiet week on the economic calendar within the EU, a lot will be made of the issue and how it could threaten the entire stability of the EU. This comes despite a strongly supportive response from ECB chief Christine Lagarde that they stand ready to help to bloc economically. Those forex trading the Euro though, will want to see more substantive action beyond the words and rhetoric at this point.

Confusion Also Reigns for GBP and British Lockdown

Sterling also improved slightly on Monday, though this is more off the back of a slightly weakening USD than any great strength in the Pound. There is also ongoing confusion around the British government’s advice. PM Boris Johnson appeared to contradict some of his own policy by encouraging people to get back to work. There has also been criticism of the government’s plans to potentially enact a 14-day quarantine for outside visitors, though some areas are now experiencing a spike in cases having begun to reopen. South Korea is one such example, with more than 20 new cases reported leading bars and restaurants to be re-closed.

The ongoing issue of Brexit also continues to pressurize the Pound. Talks have continued, but no breakthroughs have yet been made. This issue will continue to come more into focus as the end of year deadline closes in.

Slight Gains Expected on Opening Bell

Despite the global turmoil, markets continue to improve. All the major US indices are reporting slight gains in pre-market trading prior to the opening bell. The Dow Jones will be looking to claw back some of the 100 points it lost yesterday, while others will hope to keep chipping away to regain their pre-virus levels.

A tentative eye will be on the progressive reopening of the economy, particularly given the rise in cases elsewhere this has taken place. Traders will also be waiting to hear from Dr. Anthony Fauci who is set to testify before the Senate health committee today to discuss the impact of potential reopening.

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