EUR/USD rises near its highest level in two years and a half
Last Updated on December 29, 2020
EURUSD Weekly Outlook: 28th December 2020
EUR/USD witnessed a rise during trading today, Monday in the European session, recording the second consecutive daily gain to trade near its highs in two and a half years that it recorded during the past week. The current rise comes with an improvement in investor appetite to buy risky assets after the issuance of US President Donald Trump “made a statement yesterday in which he indicated that he signed the $ 2.3 trillion fiscal stimulus project to support the economy from the repercussions of the Coronavirus.
This morning, EUR/USD added more than 0.4% to trade at $1.2240 from today’s opening session at $1.2187.
At the conclusion of last Thursday’s trading, EUR/USD lost nearly 0.1% after recording 0.2% of the previous day’s gains.
Last week, the single currency recorded its first weekly decline with losses amounting to about 0.6%, as a result of the correction activity, after it reached its highest level in two and a half years at $ 1.2272.
President Trump announced his approval of the fiscal stimulus bill, estimated at $ 2.3 trillion, of which about $ 900 billion is for the relief package for the repercussions of the Coronavirus, which reduced fears of a partial government shutdown that was supposed to happen on Tuesday.
Will EUR/USD continue increasing in 2021?
The Euro is heading towards recording its best annual performance in more than a decade by the end of 2020, with gains estimated at 9%, despite the losses it incurred in the first quarter of the year, reaching its lowest level in several years at $ 1.0640.
The current question is whether the Euro will continue to strengthen in 2021, the currency will move depending on several key factors in the coming year.
First, he will interact with the Senate elections in Georgia. If the Republicans win one of the seats, this means that “Mitchconel” will remain the leader of the majority, and as such, this will lead to a great stalemate in Washington and will make it difficult for “Joe Biden” to achieve his agenda, but if he wins Democrats, this may lead to a further stimulus which will also be bullish for the euro in the near term.
Second, the euro will react to the ECB’s moves, in its previous interest rate decisions. The bank expressed its regret about the strength of the euro, but it still lacks support for devaluation.
Finally, the currency will also move depending on market sentiment, so if risk sentiment continues the currency will continue to appreciate, however, there is also the possibility that investors will begin to worry about risks such as global debt inflation.
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