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20/11/24_Current dollar exchange rate and its reaction to the current market situation

The US dollar weakened on Monday due to prospects for the early introduction of coronavirus vaccines, which offset concerns about economic restrictions against the spread of the virus.

 

The New Zealand dollar attacked a two-year high of $ 0.6962 as very strong retail sales data were released.

 

The euro strengthened slightly to 1.1872 USD, last week repeatedly failed to break the resistance of 1.1893 USD. The November high of $ 1.1919 needs to be broken to continue the uptrend.

 

Capital Economics analysts are optimistic about the longer-term outlook for EUR/USD.

 

“We think that the exchange rate will continue to rise over the next few years against the background of lower risks to the stability of the euro area; the widening real income gap between the euro area and the US; and the continuing recovery of the global economy, “was written in the report.

 

They have raised Euro forecasts and now predict $ 1.2500 at the end of 2021 and $ 1.3000 at the end of 2022, an increase of $ 1.2000 and $ 1.2500 from previous years.

 

USD also declined slowly relative to the Japanese yen, most recently at 103.74, just above support at 103.62. Breaking the support would lead to a re-test of the November lowest value of 103.16. This value was the lowest since the March market turbulence.

 

As for DollarIndex, the exchange rate fell to 92.266 and is again very close to the supports at 92.129 and 91.373.

 

First people in the United States could have been vaccinated with the COVID-19 vaccine the day after the US Food and Drug Administration approved approval in mid-December. The UK could also give regulatory approval for Pfizer-BioNTech’s COVID-19 vaccine this week.

 

On the other hand, millions of Americans are expected to ignore warnings to stay home for Thanksgiving, while Germany may have to extend the lockdown until mid-December.

 

The wave of coronavirus restrictions in the United States has sparked speculation that the Federal Reserve may need to ease monetary policy further as the fiscal stimulus agreement is still out of sight.

 

Source: Investing.com

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