Fed’s Powell reported that rates would likely remain steady. US dollar would help the EURUSD to end the four-day series of losses. Weak Eurozone data and trade issues may cap upside in EURUSD. Here is the EURUSD Fundamental Analysis of 26 November, 2019.
26 November, 2019 | AtoZ Markets – The EURUSD weakened to $ 1.1013, near a weekly low of $ 1.10035 touched on Monday. EURUSD could break a four-day losing streak. US Federal Reserve (Fed) chairman Jerome Powell said Monday that interest rates are not likely to rise anytime soon.
EURUSD Fundamental Analysis – 26 November 2019
Fed’s Powell told Providence, Rhode Island, that low inflation expectations feed on themselves. And that makes it harder for the Fed to support the economy, CNBC said. The head of the central bank reiterated his commitment to achieving symmetrically and sustainably the inflation target of 2%. And it will use tools to ensure that there is no unhealthy downward drift of expectations and inflation.
Powell’s comments indicate that the Fed is likely to keep rates stable for some time unless inflation rises to well over 2%. The markets could, therefore, offer US dollars, which would allow EURUSD to make gains for the first time after 19 November. The pair recorded marginal losses on Monday to confirm the fourth consecutive daily decline.
Powell’s comments may weigh on the US dollar. The rise in the common currency seems limited. Thanks to the weakness of the PMIs of the eurozone and Germany published last Friday.
US-China Trade Issue
Besides, reports indicating that the United States and China have reached a consensus on resolving trade issues have failed to stimulate risk appetite. In other words, the broader markets are not in favor of significant gains on the euro. On Tuesday as optimism over a trade deal between the US and China undermined the appeal of the haven unit.
The Chinese daily Global Times, a tabloid run by the ruling Communist Party’s official daily, said on its Twitter feed Monday. The two countries are very close to a ” phase one ” trade deal, excluding “negative” reports from the media. China seems to be in favor of the agreement. However, the dollar could rise again if US authorities go to China, “said Yukio Ishizuki, chief strategist at Daiwa Securities.
Last week, the Chinese government invited US Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin to Beijing for face-to-face talks. That was according to the Wall Street Journal. “Trade over the next two weeks will focus on the agreement between the United States and China,” said Ishizuki of Daiwa.
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