EUR/USD extends its gains to its highest level in more than three months

Last Updated on December 18, 2020

EURUSD Weekly Outlook: 17th December 2020

EUR/USD continued to rise at the beginning of the week’s trading in the European session, reaching its highest level in 13 weeks. These expanded gains come as top CFD investors continue to focus on risk in the markets and direct them to buy high-risk currencies.

Today’s trading session ends the single currency will record the largest monthly increase since July due to the increasing optimism surrounding the financial markets as a result of the positive developments in the Coronavirus vaccines and the increasing expectations of US stimulus.

During today’s FX market, EUR/USD rose by about 0.2% to trade at $1.1983, from today’s opening session at $1.1961.

At the close of trading on Friday, the single currency recorded gains of about 0.4% against the US currency, and over the course of last week’s transactions, it achieved gains of 0.9% against the dollar, its second consecutive weekly rise.

EUR/USD achieved the biggest monthly gain since last July

By the end of today’s currency market,  the euro will go towards recording the first monthly increase with gains that may reach about 3% against the US dollar, which will be the largest monthly gain since last July.

The vast gains achieved by the single currency during the last period come due to investor optimism that pharmaceutical companies will continue to announce their development of vaccines for the Coronavirus with an efficiency of close to 90%, which increases the chances of the vaccine actually being present in the market before the end of the year, and this has encouraged an improvement in risk appetite.

Daily chart of EURUSD - 17th December 2020

This is in addition to the easing of political tensions in the United States after US President “Donald Trump” gave the green light to start the procedures for transferring power to the new administration under the leadership of President-elect “Joe Biden”, in addition to the increasing chances that former Federal Reserve Chair Janet Yellen will take over the ministry.

Later in the day, the President of the European Central Bank, Christine Lagarde, will speak at the European Policy Center at an event before the member finance ministers of the euro area. Her speech is expected to address the future of European monetary policy in light of the new developments in the region from the second closings in Many European countries.

The US dollar deepens its losses

The US dollar expanded its decline against most major currencies, registering its lowest level in two and a half years, in light of continued weak demand to buy it amid investor appetite for risk, with positive news related to Coronavirus vaccines and increasing expectations that the new US administration would take broad stimulus measures to support the economy from damages Corona Virus.

Professional Trader and Analyst, economist in Financial and Forex marketsince 2004.holds an MBA from the American University in Egypt. Mohammed works as an economic writer and technical & fundamental analyst for many international Forex and financial trading companies in both English and Arabic on a daily basis.
Mohammed Abdelkhalik

Relevant news