EURUSD Goes Down 0.20 as Covid-19 Spread Peaks at Record Highs

EURUSD Goes Down 0.20 as Covid-19 Spread Peaks at Record Highs
  • EURUSD falls as pandemic worries pressure the single currency.
  • France has recorded an unprecedented increase in disease spreads for one day.
  • Spain puts in a country-wide curfew.
  • The second wave of the virus could continue pressuring the ECB to bring on another stimulus.

EURUSD has been trading in the red because the second coming of the Covid-19 accelerates in the EU and threatens to slow the already shaky rallying of the economy.

The pair traded at session low points around 1,1835 as this was written, a 0.20 percent drop on the day. The common currency has been offered at about 1,859. The 61,8 percent retracing of Fibonacci’s sales from 1.2014 to 1.1612 – as Asian hours of trade have been ongoing. With losses in the Standard & Poor’s 500 Index futures and oil costs, the USD draws haven bids versus the majority currencies.

Covid-19 disease spreads

French authorities talked on Sunday about a daily record of new Covid-19 cases, climbing to 52 thousand cases diagnosed. The Italian government has put in place a partial lockdown that is going to continue to 24 November. In the meantime, Spain gave a green light for the announcement of a state of emergency and a national curfew from 11 p.m.-6 a.m. to control the spread of the disease.

Although less stringent than in Q2, the new rules are likely to influence the financial sector negatively. There are already deflation-like pressures in the EU. In September, the common currency bloc’s inflation declined even more and continued pressuring the European Central Bank to bring on some stimulus.

Goldman Sachs has recently predicted that the ECB will increase its coronavirus bond-purchasing program by EUR 400B in December ($470B). But with Eurozone countries coming back with stringent distressing rules for controlling the 2nd wave of the virus, marketplaces could start to boost the European Central Bank’s aid.

Therefore, the route of less resistance seems to be heading down for the EURUSD pair. While the USA is also facing another Covid-19 wave, its central bank isn’t pressured to provide stimulus straight away.

The downside shift can accelerate if the German Expectations Index for October prints under expectations. The information is arriving at 09:00 GMT today.

Technical standards, EURUSD

Technical standards, EURUSD