EUR/USD approaches a 1.1100 as the US dollar drops further versus majors
- Euro having the best day versus the US dollar since December.
- EUR/USD heads for first weekly close in over a month.
The EUR/USD pair rose further and printed a fresh weekly high at 1.1090. So far today it gained more than fifty pips, having the best daily performance since December. It holds firm near the top, slightly above the 20-day moving average around 1.1080.
A decline of the US dollar against majors boosted the EUR/USD pair. The US Dollar Index is falling for the second day in row, erasing the gains of the last two weeks. On Wednesday, DXY peaked at 98.20 and it stands at 97.46, the lowest in ten days. In Wall Street risk aversion dominates the trading session. The Dow Jones falls 1.40% and the Nasdaq 1.05%. The 10-year yield is at a three-month low at 1.52%, about to test October lows.
Despite falling versus majors during the American session, the greenback remains strong against emerging currencies on the back of the negative market sentiment prevailing.
After falling for five consecutive weeks, EUR/USD is about to post the first positive close. The pair started to rise after the FOMC meeting. However, fears about the economic impact of the coronavirus are the main driver for markets and will likely continue to be next week.
US economic data released over the week had a limited impact. Next week reports include the ISM manufacturing, housing data and the critical employment report on Friday. Analysts will look not only for the NFP number but also to wage trends. In the Eurozone, the December retail sales report will be released.