EUR/USD: Economic gap reinforces the dollar – Elam
Weak German data, US upbeat data, coronavirus hopes, China lower tariffs and EU-US trade fears are the five reasons to have a bearish bias in the EUR/USD pair, according to analyst at FXStreet Yohay Elam.
“Germany has reported a slump of 2.1% in Factory Orders in December – far below an increase of 0.6% expected. The hard data has been consistently showing a manufacturing recession and is weighing on the euro.”
“ADP's private-sector employment report smashed expectations with an increase of 291,000 jobs – nearly double 156,000 expected. The labor market is alive and kicking. The ISM Non-Manufacturing Purchasing Managers' Index also beat expectations with 55.5 points. The strength of the world's largest economy is underpinning its currency.”
“Investors are rotating to stocks from bonds and the resulting higher US yields are boosting the dollar as well.”