Gold 1834,28
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EURUSD 1,2157
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DJIA 29954,50
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OIL.WTI 46,935
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DAX 13285,05
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One of the highlights of the week was Thursday’s ECB meeting and Christine Lagarde’s press conference in which she outlined how the ECB will proceed. It is worth noting that this is the last meeting of the year. Investors will be guided by these statements for the next few months.
EUR/USD
The ECB council finally decided to expand the emergency pandemic asset purchase programme by EUR 500 billion and to extend it to March 2021. On one hand, additional injections of funds should weaken the Euro against the Dollar. On the other hand, the Euro is turning into the Japanese Yen when the currency appreciates on additional monetary stimulus.
The growth is still hampered by the Brexit deal that London and Brussels cannot agree on. The final decision is due on December 13. It is still hard to say what decision will be made and how it will affect the European currency.
Taking into account all the current factors we should suppose that EUR/USD will continue to move in the positive direction, although many believe that it is detrimental for the EU economy. However, the central bank does not believe that the high EUR/USD will have much of an impact on economic recovery and inflation growth.
The role of the Euro in the global economy is beginning to change towards a safe haven currency. Any action by the ECB is perceived only positively, which once again pushes the EUR/USD exchange rate upwards.
After the lifting of the veto by Poland and Hungary, the final decision to support the Euro will be a positive decision on a 2.2 trillion Euro bailout from EU leaders to support the EU economy.
Only the very serious consequences of Brexit and possibly another lockdown due to COVID-19 can slow down the growth of the European currency. Already now it can be seen that the European Bank is hardly in a position to fundamentally influence the Euro exchange rate, but only tries to smooth out strong fluctuations.
What awaits us today?
08.00 German consumer price index for November
14.30 PPI Producer Price Index for November in the US
14.30 US Consumer Expectations Index from the University of Michigan for December
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