Positive market sentiment due to rising retail sales
The euro exchange rate rose above 1.20 as the continent began to report a decline in the number of COVID1-9 cases, although the number is still rising. The pound also benefited from some weakness in the dollar and recovered from a weekly low. The main factor appears to be the slump in US retail sales, as the figure rose 9.8% in March, largely due to cheque stimulus spending. This positive sentiment was also felt on Wall Street.
Euro gets stronger again despite domestic problems
Recently, the entire European continent has been struggling with itself as the number of cases of COPID-19 in the region increases disproportionately. France was again in a particularly unfavourable position when several restrictions were reintroduced. However, as the weekend approaches, there are some hopeful signs that the currency is moving above 1.20 in FX trading.
One of the factors behind this upward movement is the fact that the number of such cases in Paris has fallen. This is a slight gain for the euro, with the move away from the safety of the US dollar also playing an important role. The decline in Treasury yields also led to a downward move in the greenback as traders turned away from safe havens. This comes just weeks after interest rates recently hit a high of 1.77%.
recovery amplifier for Sterling
The pound is also continuing its positive turnaround against the dollar this week. Currency brokers have seen a decline from the highs reached earlier this year, although currency pairs appear more stable today, trading above the 1.38 level.
This decision was partly preceded by the success of the vaccination campaign so far in the UK. The reopening of pubs, bars and gyms in England earlier this week gave an initial boost to the pound, but the trend continued with the weak dollar. It is now essential to keep up with the pace of the vaccination programme in the UK. This is not so easy, given the current controversy with the EU over vaccination and growing concerns about the safety of AstraZeneca’s vaccine in particular.
Huge retail sales push market above
There seems to be no end to the positive movements on Wall Street at the moment. Markets are trading higher today, supported by a huge increase in retail sales for the month of March.
This figure exceeded expectations of a 9.8% increase because many Americans had spent their $1,400 stimulus check. Initial jobless claims also fell for the first time, contributing to the week’s good economic news. The estimate of 710,000 applications for unemployment benefits is slightly higher, although the actual number is much lower at 576,000. All this positivity is also accompanied by new records. The Dow Jones reached the 34,000 mark for the first time.
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