ECB Expectations May Be Overly Confident
Investors felt confusion before the European Central Bank (ECB) meeting. They speculated whether it would end with confidence in economic recovery or with fear of the Covid-19.
The ECB’s optimism about the recovery the day before supported the common currency. Even though economies worldwide coped with the Covid-19 pandemic better than expected, the damage is significant. The rise in the number of infected cases continues to be worrying.
Comments on the exchange rate are limited. They tend to fluctuate currencies even if the central bank does not intend direct intervention.
Compared to the beginning of the week, now markets seem more optimistic. Earlier this week, AstraZeneca, a British-Swedish multinational pharmaceutical company, faced an interruption for a phase 3 trial of its Covid-19 vaccine. The company stopped the experiment after a patient fell ill.
The trend has turned after the initial crash in stock markets and the dollar rebound.
The EU obtained millions of immunization doses from Pfizer, an American multinational pharmaceutical corporation. It is also progressing ahead in testing its vaccine.
Trump has lost against Biden in polls
Earlier this year, US President Donald Trump faced heavy criticism for giving little weight to the coronavirus pandemic. Joe Biden took advantage of it, and now he is ahead of Trump in polls. However, Trump received high marks for managing the economy.
Recent optimistic NFP nonfarm payrolls encouraged the dollar. They may also lessen Republicans’ sense of urgency to offer more aid.
The Brexit drama would have a hard time competing for influence with developments from the ECB and the United States. However, while the pound is the primary driver, the EUR/USD could also shake in response to an emergency meeting held by high-level negotiators from the EU and the UK.
Brussels is regarding bringing charges against London after the British government published Brexit deal legislation that violates the Withdrawal Agreemen
Get the latest economy news, trading news, and Forex news on Finance Brokerage. Check out our comprehensive trading education and list of best Forex brokers list here. Subscribe now and receive FREE updates on the market today!