- Fed's open-ended easing is weighing over the US dollar.
- EUR/USD bounced in Asia and is trading near 1.08 at press time.
- Preliminary Eurozone PMI is likely to disappoint expectations.
The anti-greenback sentiment triggered by the Federal Reserve's (Fed) open-ended asset purchase program is boding well for the single currency and helping EUR/USD gain altitude.
EUR/USD on the rise
EUR/USD picked up a bid near 1.0720 and rose to a session high of 1.0822 as investors offered US dollars in response to the Fed's announcement on Monday that there is no limit to their Quantitative Easing program.
Reports that the US Senate and the Trump administration were close to reaching a bipartisan agreement on the massive coronavirus spending package late Monday likely added to the bearish pressure around the dollar and put a bid under the risky assets. Asian stocks gained with the futures tied on the S&P 500 adding 4%.
The Fed's unlimited asset purchase plan could continue to ease stress in the credit markets, yielding a deeper drop in the greenback.
EUR/USD, however, may come under pressure in Europe if the Eurozone and German preliminary Manufacturing PMIs for March disappoint expectations. The data is likely to surprise on the lower side, courtesy of the coronavirus outbreak and will likely remind investors of how badly COVID-19 affects the economy, according to BK Asset Management's Kathy Lien, who sees EUR/USD falling to 1.05 over the near term.
EUR/USD is trading at 1.0803 at press time, representing a 0.7% gain on the day. The pair hit a high of 1.0822 in Asia and is largely trapped in a 1.0830-1.0735 range since March 20.
Technical levels
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
AUD/USD consolidates below 0.6600 amid the US election uncertainty
AUD/USD remains on the defensive below the 0.6600 mark on Tuesday as traders seem reluctant ahead of this week's key event risks – the US presidential election and the FOMC policy meeting. In the meantime, the unwinding of the Trump trade continues to weigh on the USD and offers some support to the currency pair.
EUR/USD posts modest gains above 1.0850, all eyes on the US presidential election results
The EUR/USD pair trades with mild gains near 1.0880 during the early Asian session on Tuesday. The US Dollar edges lower as traders brace for the outcome of the US presidential election and a likely interest rate cut from the Federal Reserve, which supports some support for the major pair.
Gold trades around $2,730
Gold price is on the defensive below $2,750 in European trading on Monday, erasing the early gains. The downside, however, appears elusive amid the US presidential election risks and the ongoing Middle East geopolitical tensions.
RBA widely expected to keep interest rate unchanged amid persisting price pressures
Australia’s benchmark interest rate is set to stay unchanged at 4.35% in November. The focus remains on Reserve Bank of Australia Governor Michele Bullock’s comments and updated economic forecasts. The Australian Dollar could wilt if RBA Governor Bullock ramps up bets for a December rate cut.
US presidential election outcome: What could it mean for the US Dollar? Premium
The US Dollar has regained lost momentum against its six major rivals at the beginning of the final quarter of 2024, as tensions mount ahead of the highly anticipated United States Presidential election due on November 5.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.