EUR/USD ended the week with solid gains. The US dollar was the weakest major currency on the Forex market during the week. The euro, on the other hand, was one of the strongest, ending trading either flat or higher against its most-traded rivals.
Market analysts explained the weakness of the dollar and the resulting strength of the euro for the most part by hopes for fiscal stimulus in the United States. But most analysts express strong doubts about the ability of US politicians to reach an agreement before the presidential election on November 3. Coupled with the rising number of coronavirus cases worldwide, that can easily result in a strong bounce of the US currency, which is usually perceived as a safe haven.
Macroeconomic data released in the United States and the eurozone over the week was mixed. Experts highlighted an interesting contrast between US and European economic reports. The USA has a strong services sector, while the manufacturing sector was a bit weaker (though still relatively strong). At the same time, the European manufacturing sector demonstrated decent performance but the services sector continued to contract. Economists also pointed out that the US housing market looked to be in a very good state.
The European Central Bank will hold a monetary policy meeting next week. The most important macroeconomic release in the United States will most likely be a gross domestic product report, though it can be easily overshadowed by news related to the election.
EUR/USD gained from 1.1720 to 1.1860 over the week. GBP/USD was up from 1.2895 to 1.3044, reaching the high of 1.3176 during the week. USD/JPY dropped from 105.37 to 104.71.
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