Gold 1778
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EURUSD 1,1959
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DJIA 33975,50
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OIL.WTI 63,045
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DAX 15524,50
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In today’s review let’s talk a bit about the state of Europe’s financial sector and what’s in store for the euro in the near future. Given that neither the dollar nor US interest rates have risen after the consumer price index increase in March, it can be assumed that the market is entering a new phase of the relationship.
EUR/USD
A lot of worries for investors were added to the steady rise in yields on 10-year US Treasury bonds. This has made quite a few other assets unattractive to buy. If falling yields continue, despite strong US GDP growth and economic indicators, the popularity of risky assets will increase, which will prove to be a bearish signal for the dollar.
There are still problems in the EU that will be difficult to solve in the short term. One is the supply of coronavirus vaccines. AstraZeneca’s failure has set back the European Union’s vaccine supply far, which will literally affect the lifting of restrictions and the recovery process. Procurement of other vaccines in Europe has been very slow. Therefore, there is little hope that Europe will deal with the pandemic quickly.
What will happen to the euro exchange rate in the near future? For the European Central Bank there is no need for an expensive euro right now. It is all about the national debts that have to be serviced. The more expensive the euro, the more expensive it is to pay the debts. The gradual fall in the EUR/USD exchange rate since the start of the year has brought some relief to the current situation.
There is important GDP data coming out at the end of April. Forecasts on this data are disappointing as restrictions are still causing serious damage. Also ahead is the ECB meeting on April 22nd which is unlikely to make any monetary policy adjustments. Most likely this meeting will discuss the impact of the huge US stimulus on the EU economy, such huge injections are affecting the whole world anyway.
For now on the EUR/USD pair, we can assume that the rapid rise from 1.17 to 1.19 is a correction to the downtrend from the beginning of this year, but there is a possibility that the weak dollar will provide further support to the euro’s rise.
01.50 Japan’s overall trade balance for March
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